Mexico: Inflation comes in at highest level since June 2023 in June
Inflation came in at 5.0% in June, which was up from May’s 4.7%, and above both market forecasts and the Central Bank’s 2.0%–4.0% target range. June’s figure marked the highest inflation rate since June 2023, with the slump in the peso following the early June general elections likely playing a role in the uptick. Looking at subsectors, the increase was driven by rising price pressures for food, beverages and tobacco, and housing.
The trend was unchanged, with annual average inflation coming in at May’s 4.6% in June. Meanwhile, core inflation fell to 4.1% in June from the previous month’s 4.2%.
Finally, consumer prices increased 0.38% over the previous month in June, contrasting May’s 0.19% drop. June’s figure marked the highest reading since January.
On the monetary policy implications, Credicorp Capital analysts said:
“Given the current total inflation, it is likely that most members of the Board will continue to maintain a cautious stance. Therefore, although we continue to anticipate a 25 basis point cut in August 2024, we assign a higher probability to a pause in September 2024, in line with the institution’s prolonged caution.”