Mexico’s inflation eased more than expected in November, increasing the chance of a fourth consecutive interest rate cut at the central bank’s meeting next week.
According to a report released today, consumer prices rose 4.55% year-over-year, below the 4.6% median estimate and down from 4.76% in October.
Core inflation, which excludes items like food and fuel, declined to 3.58%, just under the 3.6% estimate. The central bank, known as Banxico, targets an inflation rate of 3%, plus or minus 1 percentage point, and will meet on December 19.
Although headline inflation remains a concern, Banxico has focused on the downward trend in core inflation. Banxico’s Governor Victoria Rodriguez and its board members are worried about Mexico’s economic slowdown, which is expected to continue into 2024 and 2025.
Last month, Banxico cut its key interest rate to 10.25% and hinted at further reductions. Analysts anticipate another 25 basis point cut next week. The bank predicts 1.8% growth for the economy this year, slowing to 1.2% in 2025.
By CEO NA Editorial Staff
