November Inflation Shows Encouraging Signs with a 4.56% Increase

In the first half of November, annual inflation in Mexico decreased more than expected, reinforcing the idea that the central bank will continue to lower its interest rate. According to data released on Friday by Inegi, the general consumer price index moderated to 4.56% after rising in the previous two halves of the month, moving back toward the official target of 3% +/- one percentage point.

Experts had projected a rate of 4.69%, according to a Reuters survey. Additionally, core inflation, which is considered a more accurate indicator for analyzing price evolution as it excludes highly volatile products, stood at 3.58%, the lowest level since May 2020. Last week, the Bank of Mexico cut its benchmark interest rate by 25 basis points for the third consecutive time, highlighting progress in reducing core inflation and suggesting the possibility of further adjustments in credit rates. Victoria Rodríguez, governor of the central bank, reiterated in an interview with Reuters that the institution could continue to reduce rates from the current 10.25% due to progress in disinflation. The next decision from the Bank of Mexico is scheduled for December 19, the last of the year. In just the first 15 days of November, prices increased by 0.37%, while the core index reported a rate of 0.04%, according to Inegi.

This proactive approach by the central bank regarding inflation is a sign of fiscal prudence that could stimulate economic growth. However, it is crucial to maintain a balance to ensure that the measures taken do not generate adverse long-term consequences for the country’s economic stability.