Mexico August Inflation Rate Falls to Nearly 3-Year Low

Mexico's annual inflation rate dropped to 3.16 percent in August 2019 from 3.78 percent in the previous month and slightly below market forecasts of 3.2 percent. It was the lowest inflation rate since October 2016, mostly due to a fall in cost of energy.

Year-on-year, energy prices declined 1.53 percent in August, after rising 0.76 percent in July. In addition, cost of food, beverages & tobacco rose 4.63 percent, slowing from a 4.87 percent gain in the prior month; and agriculture goods inflation eased to 2.78 percent from 6.33 percent, mainly due to fruits and vegetables prices (-0.75 percent from 5.61 percent) and livestock goods (5.77 percent from 7.06 percent). 

On the other hand, cost of non-food goods advanced 2.85 percent, faster than a 2.78 percent rise in the prior month. Also, inflation was steady for services (at 3.79 percent), of which other services (4.40 percent, the same as in July), education (4.66 percent from 4.91 percent), and housing (2.92 percent from 2.86 percent).

On a monthly basis, consumer prices went down 0.02 percent in August, after a 0.38 percent increase in July and compared with market consensus of a 0.02 percent gain. Agriculture goods prices decreased 1.5 percent, following a 2 percent rise in the previous month; and energy costs dropped at a faster pace (-0.37 percent from -0.19 percent). Additionally, service inflation slowed to 0.09 percent from 0.38 percent in July. Meanwhile, goods prices rose further (0.3 percent from 0.15 percent).

The core index, which strips out some volatile food and energy prices went up 0.2 percent from a month earlier (from  0.26 percent in July) and by 3.16 percent over the previous year (from 3.82 percent in July).

Mexico August Inflation Rate Falls to Nearly 3-Year Low

INEGI | Stefanie Moya |
9/9/2019 11:25:07 AM