Mexico Inflation Rebounds to 3.26 Percent in August
The annual headline rate climbed from 3.12 percent in July, halting a four-month decline. Core inflation eased to 3.88 percent, remaining above the central bank’s target.
Mexico’s annual headline inflation rate rose to 3.26 percent in August. This figure marks a 0.14 percentage point increase from the 3.12 percent recorded in July. The rise ends a four-month streak of monthly declines that began in April.
Month-over-month inflation was 0.20 percent. The annual core rate, which excludes volatile food and energy items, fell to 3.88 percent from 3.95 percent in July. Both headline and core figures came in slightly below the median estimates surveyed by Bloomberg.
Services Prices Remain Elevated
Services recorded the highest annual price increase among major categories. Inflation in this sector reached 4.33 percent in August, down slightly from 4.36 percent in July. Education fees drove a significant portion of this rise, jumping 6.04 percent annually as students returned to school.
Goods inflation stood at 3.41 percent annually. Processed food, beverages, and tobacco prices rose 4.68 percent. Non-food goods saw a 2.32 percent annual increase. Energy prices, including electricity and gasoline, climbed 3.33 percent year-over-year.
Agricultural Deflation Offsets Other Costs
Prices for agricultural products fell 1.53 percent annually. Meat prices dropped 5.22 percent, while fruit and vegetable prices rose 4.1 percent. This deflation in the agricultural sector partially offset higher costs in other categories.
Central Bank Holds Rates Steady
The Bank of Mexico is unlikely to cut rates further this year. The central bank targets 3 percent inflation. Its current forecast projects an inflation rate of 3.5 percent by the end of 2026. Analysts expect the headline rate to converge to the target in the final quarter of 2027.
According to GN markets/inflation (en-US), the peso traded at 16.97 against the dollar at midday Thursday. Mexico’s economy grew 1.4 percent in the second quarter. Unemployment remained at 2.9 percent in July, while the informality rate rose to 56.2 percent.
