Investor Alert

Dow Jones Newswires Archives | Email alerts

Oct. 22, 2021, 7:52 a.m. EDT

Mexico's Inflation Rate Moves Higher in Early October

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

or Cancel Already have a watchlist? Log In

By Anthony Harrup

MEXICO CITY--Mexican inflation picked up in the first half of October with increases in prices of most categories of goods and services and a jump in electricity costs as summertime subsidies ended.

The consumer price index rose 0.54% in the first two weeks of the month, pushing the 12-month inflation rate up to 6.12% from 6.0% at the end of September.

Electricity led the increase in early October as seasonal subsidies designed to lower air-conditioning costs for households ended in a number of cities, and propane gas prices rose.

Core CPI, which excludes energy and agricultural products, rose 0.33% for an annual rate of 5.12%, its highest level since the 2008-2009 global financial crisis.

The Bank of Mexico raised interest rates at its previous three monetary policy meetings as inflation persists above its 3% target and inflation expectations have been steadily increasing. The central bank is widely expected to raise rates again in November and December, lifting its overnight interest-rate target to 5.25% from the current 4.75%.

At the end of last month, the central bank raised its inflation forecasts and said it expects the annual rate to remain above its target well into 2023.

"With inflation set to remain stubbornly high, it's clear that the Bank of Mexico's tightening cycle has further to run," Capital Economics said.

Food and beverage prices were up 8.34% in the 12 months through mid-October, and energy prices were 12.67% higher. Services costs have also picked up with more economic activities reopening, and were up 3.58% in mid-October.

Write to Anthony Harrup at anthony.harrup@wsj.com

This Story has 0 Comments
Be the first to comment
More News In
Dow Jones Newswires

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.