Mexico inflation rises 0.17 percent in June on higher costs of energy and services

Nathan Andrada – Fourth Estate Cooperative Contributor

Mexico City, Mexico (4E) – Inflation in Mexico accelerated in June as overall consumer prices were boosted by higher energy and services costs.

In June, the Consumer Price Index (CPI) climbed 0.17 percent, bringing the annual rate higher to 3.75 percent from 3.51 percent at the end of May, according to the National Statistics Institute report released Wednesday.

The figure was slightly below the median estimate of 11 economists surveyed by The Wall Street Journal of 0.19 percent.

The increase was driven by higher gasoline prices and air fares. Meanwhile, prices fell for new vehicles and some fresh produce.

The so-called core inflation, which excludes costs of fresh fruits and vegetables and energy, inched up 0.21 percent in June, raising the annual rate higher to 3.09 percent from 3.0 percent at the end of May.

The nation’s central bank lowered interest rates in June after a recent decline in inflation, cutting rates by half a percentage point to a record-low 3 percent, citing weak economic growth in the first few months of the year. In Bank of Mexico’s policy decision on Friday, analysts widely expect the bank to keep the overnight rate unchanged.

The central bank forecasts the annual inflation rate to stay within its 2 percent to 4 percent target range by the end the year, and to be at 3 percent by early 2015.

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