Mexico’s Inflation Projected to Decrease in Early September: Reuters Poll

MEXICO CITY – Mexico’s annual inflation is expected to continue its downward trend in the first half of September, according to a recent poll of analysts. This development has led to increased speculation that the central bank will once again lower its benchmark interest rate in its upcoming announcement.

The median prediction from 11 analysts suggests that the overall consumer price index (CPI) may drop to 4.73%, marking the fourth consecutive two-week period of decline. However, this figure remains above the official inflation target of 3%, plus or minus one percentage point.

The core inflation index, which omits volatile items to provide a clearer picture of price trends, is anticipated to decrease to 3.97%, the lowest level since February 2021.

For the first half of September, it is estimated that prices rose by 0.15% compared to the preceding two weeks, with core prices increasing by 0.23%, according to the poll.

In early August, the central bank’s board reduced its benchmark interest rate by 25 basis points amid a split vote. The decision was influenced by expectations that the current inflation outlook would permit discussions of further monetary easing.

The Bank of Mexico is set to announce its next monetary policy decision on Thursday, following the Federal Reserve’s recent initiation of a monetary policy easing strategy with a significant half-percentage-point rate cut. This move creates an opportunity for the Mexican central bank to consider further adjustments to interest rates.

Additionally, the National Statistics Institute is scheduled to release consumer price data for the first half of September on Tuesday.