The underlying inflation index in Mexico rose in April to 3.93 percent, its highest level since August 2024. In the goods sector, the increase was 3.38 percent, a figure not recorded since May 2024, while in services there was a rise of 4.56 percent, surpassing the previous month's record of 4.35 percent.
In terms of the categories with the highest increase, education stands out in services with an annual advance of 5.86 percent and housing with an increase of 3.64 percent. On the other hand, in goods, the largest rise was seen in the food, beverage, and tobacco sector, with an annual increase of 4.42 percent. The non-underlying index stood at 3.76 percent, showing a decrease compared to the previous month.
Alberto Ramos, chief economist at Goldman Sachs for Latin America, points out that the inflation figures support the continuation of the interest rate normalization cycle, but also indicate that the fight to reach the inflation target still persists. On the other hand, the survey from Citi's research unit projects that inflation in Mexico will close 2025 and 2026 at 3.8 percent.
Inflation in Mexico accelerated more than expected in April but remained within the central bank's target, which will likely lead to a half-point interest rate cut by Banco de Mexico (Banxico) next week. Regarding GDP growth, an increase of 0.1 percent is forecast for this year and 1.5 percent for next year.
Tariff policies under the administration of Donald Trump have raised concerns about potential investments in Mexico this year. The underlying inflation rate, which excludes volatile items such as food and fuels, rose to 3.93 percent compared to the previous month when it was at 3.64 percent. Banxico aims for an inflation rate of 3 percent with a variation of 1 percentage point, having reduced interest rates and with a new decision scheduled for May 15.
