Consumer prices rose 4.64% from the same month a year earlier, down from 4.79% in July, the national statistics institute reported Thursday. The result was roughly in line with the 4.62% median estimate of economists surveyed by Bloomberg, giving some relief to policymakers who maintained borrowing costs at 11.25% in August for the third decision in a row.
“This is a positive report that will surprise Banxico to the downside, as the deceleration of core inflation could be stronger than expected,” said Marco Oviedo, a senior fixed income strategist at XP Inc., while cautioning that September tuition fees could drive a climb in prices. On “the goods price front, the print is also very encouraging. The disinflation process continues.”
Mexico has faced seasonal inflationary pressures explained in part by vacation expenditures, though persistent domestic demand is also behind some of the more stubborn price rises. Higher salaries and steady growth have also bolstered willingness to spend. Those trends mark a change from the pandemic, when global supply shocks drove much of the cost-of-living increases.
The central bank has been more hawkish than some counterparts in Latin America, including those in Chile and Brazil, which have already started lowering borrowing costs.