50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Mexico inflation continues slowdown in early September

Published 09/22/2023, 09:36 AM
Updated 09/22/2023, 12:10 PM
© Reuters. A man sells corn grains at a public market in Ozumba de Alzate, State of Mexico, Mexico, May 24, 2022. REUTERS/Edgard Garrido

(Reuters) -Mexico's headline inflation eased in the first half of September, official data showed on Friday, with the president calling on the central bank to focus on promoting economic growth given the improving inflation data.

Headline inflation in Latin America's second-largest economy hit 4.44% in the 12 months through early September, down from 4.64% at the end of August, data from statistics agency INEGI showed.

The latest number, below the median forecast of 13 analysts polled by Reuters, but still above the central bank's target, is likely to reinforce convictions that the Bank of Mexico will hold its key lending rate steady at an all-time high of 11.25% for longer.

President Andres Manuel Lopez Obrador on Friday said the central bank, known as Banxico, was "doing well" as inflation slows but should focus more on promoting economic growth.

"The other task that they must carry out little by little is also that of promoting growth. If not, we're talking about the Bank of Mexico standing on just one foot," the president told a press conference.

"The best thing is the balance where there's no inflation and there's growth."

Banxico, whose stated priority is "to maintain low and stable inflation," opted last month to hold its benchmark interest rate at its current level for the third consecutive time.

It warned that it would be necessary to maintain it for an "extended" period to meet its inflation target of 3%, plus or minus one percentage point.

The central bank began its rate-hiking cycle in mid-2021, raising the key rate by a total of 725 basis points by May, when it paused the cycle.

Lopez Obrador has often railed against high interest rates, warning they could slow growth.

Mexico's economy grew 0.2% in July from June and expanded 3.2% from the same month a year before, the national statistics agency said earlier on Friday.

© Reuters. A man sells corn grains at a public market in Ozumba de Alzate, State of Mexico, Mexico, May 24, 2022. REUTERS/Edgard Garrido

The closely watched core price index, which strips out some volatile food and energy prices, reached 5.78% in the year through the first half of September, INEGI said, slightly above the 5.76% expected by economists.

In the half-month period, the agency added, headline prices climbed 0.25% while the core index was up 0.27%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.