Mexico’s Inflation Rate Expected to Slow Again in September: Reuters Poll

MEXICO CITY – Mexico’s annual inflation rate is expected to have decreased once again in September, according to a Reuters poll of analysts, which heightens expectations that the central bank will continue to lower its benchmark interest rate.

The median estimate from a group of 10 analysts suggests that the overall consumer price index (CPI) for September will drop to 4.62%, marking its lowest level since March, although this rate will still exceed the bank’s official target of 3%, plus or minus one percentage point.

Core inflation, which excludes certain volatile food and energy prices, is anticipated to have eased to 3.96% in September, marking the 20th consecutive month of decline.

In August, the central bank reduced its benchmark interest rate for the third time this year, bringing it down to 10.50%. The bank’s board has acknowledged that declining prices likely pave the way for further reductions in borrowing costs.

Central Bank Governor Victoria Rodriguez indicated last week that future rate cuts could be more substantial if the inflations continues to decrease.

For September, consumer prices are projected to rise by 0.09% compared to the previous month, while core prices are expected to increase by 0.32%, as per the analysts’ projections.

The central bank has two additional monetary policy decisions scheduled for later this year, on November 14 and December 19. The most recent survey indicates that many analysts expect the benchmark interest rate to end the year at 10% and decrease to 8% by 2025.

The national statistics institute, INEGI, is set to release the official consumer price data for September on Wednesday.