Mexico’s Prices Rise Less Than Forecast for Third Month in a Rowby
Annual inflation remains below central bank’s 3 percent target
Banxico kept rate at 4.25% in August after peso rebound
Mexico’s consumer prices rose less than analysts expected for the third consecutive month in August, keeping the annual inflation rate below the central bank’s target.
Prices rose 0.28 percent from the previous month, the national statistics institute said on its website Thursday. The median forecast of 23 analysts surveyed by Bloomberg was for a 0.31 percent increase. From a year earlier, prices increased 2.73 percent, compared with 2.65 percent in July. Banco de Mexico targets inflation of 3 percent.
Mexico’s central bank, led by Agustin Carstens, left its key overnight rate steady at 4.25 percent last month, saying that a half-point increase in June had helped reduce inflation risks and that the economic outlook had deteriorated. Later in the month, the bank reduced its estimate for growth this year to as little as 1.7 percent from a previous forecast of at least 2 percent, saying that exports have been much weaker than expected despite the peso’s depreciation.
The annual inflation rate has now been below the central bank target for 16 months in a row.
The peso was little changed at 18.3674 per dollar at 8:04 a.m. in Mexico City. Despite its recovery from the Brexit vote, the currency was still the worst performer among major currencies tracked by Bloomberg after the British pound, weakening 6.4 percent this year through Wednesday.
Core prices, which exclude energy and farm costs, increased 0.19 percent in August from a month earlier, in line with the 0.19 percent median forecast of analysts surveyed by Bloomberg.