During the first half of February, inflation in Mexico experienced a slight rise, reaching 3.74% annualized, up from 3.48% observed in the previous half. During this period, core inflation was at 0.27%, while non-core inflation decreased by 0.25%.
Analysts from Citibanamex indicated that, despite the increase, inflation remains below its long-term average. It is estimated that inflation will follow a gradual downward trajectory in the first three quarters of the year, influenced by lower economic growth. Another 50 basis point cut in the interest rate is expected at the next central bank meeting in March, with no new pressures anticipated for the Bank of Mexico.
According to data published by Inegi, the Consumer Price Index experienced a slight increase due to slower deceleration in the fruits and vegetables sector. However, the current levels of core inflation suggest that it will remain below 4% throughout the year, thereby meeting the central bank's target.
In annual terms, core inflation stood at 3.63%, highlighting pressures in areas such as tuition fees (6.43%) and other services such as restaurants, medical services, and tourism (6.32%), both exceeding Banxico's target. On the other hand, non-core inflation reached 3.98% annually, with a smaller decrease in fruits and vegetables (6.25%) and an increase in livestock products (10.40%).
The observed deceleration could allow Banxico to make another aggressive cut despite threats from the Trump administration. In biweekly terms, overall inflation stood at 0.15%.
