Mexico’s inflation likely to have accelerated to 3.52 pct through mid-December

Mexican inflation is expected to continue accelerating in the near term. In the past few months, prices of food and transport, especially in the administered segment, have risen considerably due to significant decline in peso and the government’s focus on keeping its fiscal house in order.

This, along with the rise in dwelling inflation, has pushed up headline inflation as well as core inflation above the Bank of Mexico’s target level. With the sharp rise in inflation expectations and the continued pressure on the peso, inflation is expected to accelerate further in the near term. It is likely to have accelerated to 3.52 percent year-on-year through mid-December, according to a Societe Generale research report.

“Beyond 2017, inflation should moderate to Banxico’s tolerance range on rate tightening and weakening growth”, added Societe Generale.