Mexico Consumer Prices Rise More Than Expected in Early August

Mexican consumer prices rose more than expected in early August, pushing the annual inflation rate higher.

Prices climbed 0.26 percent in the first two weeks of the month, the national statistics agency said today on its website, compared with the 0.16 percent median forecast of 16 economists surveyed by Bloomberg. Annual inflation was 3.54 percent compared with 3.47 percent at the end of July. Core prices, which exclude energy and farm costs, gained 0.11 percent in the first half of the month.

The central bank forecasts inflation will end the year at about 3.5 percent and remain close to the 3 percent target next year after a surge in farm prices subsided. While inflation had slowed more than expected in the past three months and the government slashed its 2013 growth forecast to 1.8 percent from 3.1 percent, the majority of economists predict the central bank won’t cut rates this year, according to an Aug. 20 survey by Citigroup Inc.’s Banamex unit.

The peso rose 0.4 percent to 13.2015 per dollar at 8:04 a.m. in Mexico City. The currency has weakened 9.6 percent from an almost two-year high in May on speculation the U.S. Federal Reserve will dial back record stimulus.

To contact the reporters on this story: Nacha Cattan in Mexico City at ncattan@bloomberg.net; Eric Martin in Mexico City at emartin21@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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