Mexico’s annual inflation slowed roughly in line with expectations in early August, as the central bank continues to keep its interest rate at a record level to curb price growth.
Consumer prices rose 4.67% in the first half of the month from the same period a year earlier, down from 4.78% at the end of July, according to the National Institute of Statistics and Geography.
Core inflation, which excludes volatile items such as fuel and food, slowed to 6.21% from 6.52%, remaining well above the headline reading and the central bank’s 3 percent target of plus or minus 1% point.
This indicator has been a persistent concern for the central bank “Banxico.”
Mexico faces seasonal inflationary pressures explained in part by holiday spending, although domestic demand is also behind some of the more persistent price increases. Higher wages and steady growth have also bolstered the willingness to spend.
“The population is prioritizing the consumption of services and not so much of goods. If you look at the service sector, people have been saying, “Let me go on vacation and go to restaurants,” Gabriela Siller, director of economic analysis at Grupo Financiero Base said.
