LatinNews Daily - 09 February 2024

In brief: Mexico’s inflation continues to creep up

*Mexico’s national statistics institute (Inegi) has released consumer price index figures for January, which show that monthly inflation stood at 0.89% and the annual rate at 4.88%. This is up from monthly inflation of 0.71% in December, when the annual rate stood at 4.66%. Annual inflation has followed an upward trend in the last three months after nine consecutive months of decline in 2023. Core inflation, which excludes items subject to highly volatile prices, stood at 0.40% in monthly terms and 4.76% in annual terms, down from a monthly rate of 0.44% and yearly rate of 5.09% in December. The latest inflation figures come the same day as Mexico’s central bank (Banxico) announced it is maintaining its benchmark interest rate at 11.25%, where it has stood since March. In a statement, Banxico noted the rise in inflation since its previous monetary policy meeting on 14 December, stating that short-term inflation forecasts had also been adjusted upwards. Banxico now expects annual inflation in the first quarter of 2024 to stand at 4.7% (up from 4.3% in its December forecast), 4.3% in the second quarter (up from 4.1%), and 3.9% in the third quarter (up from 3.8%). Banxico has maintained its year-end inflation forecast at 3.5%. Banxico stated that it would evaluate the possibly of adjusting the interest rate in future meetings.

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