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The inflation Consumer prices in the first half of August grew 5.16% at an annual rate, while the underlying index expanded 3.98%; it is about the minor inflation After four readings, thanks to the fact that the prices of agricultural products decreased a little, after a severe drought, first months of the year.
The underlying level continued to moderate, making the figures today very positive, after several months on the rise.
“Considering also the exchange rate depreciation and the latency of risks on the outlook, a continuous cycle of cuts in the reference rate by the central bank is unlikely. Bank of Mexico“, estimated a financial analysis of Bx+.
Alejandro Saldaña, director of economic analysis of the bank, He said the biweekly variation was the lowest for the same period since 2021 and this decline was mainly due to the correction in agricultural products, especially fruits y vegetables which had been significantly pressured in previous months.
In addition, energy prices slowed down thanks to a high comparative base, where the underlying index grew at its slowest pace since the second half of February 2021.
Saldaña added that services still do not present a clear turning point in the face of a more gradual transfer of the shocks of past years (the pandemic), their greater sensitivity to the increase in wages and the lag with which some tend to update.
“However, some services other than housing and education seem to be starting to ease after showing strong increases previously, in line with the slowdown economic”.
“We estimate that year-on-year inflation exhibit some deceleration for the remainder of this year. However, we recognize that the outlook remains uncertain and some upside risks have recently become more acute.”
He said that we continue to expect lower economic growth, considering that for the second half of 2024 prices will moderate further.
In the meantimeVictor Ceja Cruz, Chief Economist of Valmex, He said that the non-core component, which includes the most volatile prices (agricultural, energy and tariffs), stood at an annual rate of 8.80%, below the 10.09% recorded in the previous fortnight.
He highlighted that among the generics of the non-underlying component with the greatest downward variation are: chayote, tomato, domestic gas LP, pollo y green tomato. On the other hand, those that showed the greatest upward variation were low-octane gasoline, electricity, eggs, squash and lemon.
“It is important to note that this component is not affected by the restrictive monetary stance”.
“Going forward, due to a slowdown in inflation, the Bank of Mexico could reduce the funding rate by 25 basis points on September 26. However, it must remain cautious and consider the evolution of the data due to the persistence of the services component at high levels.”
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2024-08-28 11:25:34