By Aida Pelaez-Fernandez
MEXICO CITY (Reuters) -Mexico’s annual inflation rate stood above expectations at 3.61% in the first half of November, official data showed on Monday, affected by sticky core inflation.
Economists polled by Reuters had forecast an annual rate of 3.56%.
Mexico’s central bank board members expect the current weakness of Mexico’s economy would reduce inflation, but underlying price pressures pushing core inflation have been a pressing worry.
The closely watched core price index, which strips out some volatile food and energy prices, reached 4.32% in the 12 months through early November, from 4.24% in the same period last month.
“Core inflation, which determines the trajectory of headline inflation in the medium and long term, shows no clear signs of slowing down,” Banco Base economic analysis director Gabriela Siller said in a post on X.
Despite persistent core inflation, Citi expects Mexico’s central bank to cut their benchmark interest rate 25 basis points in December, but “rate cuts afterwards will be more data dependent,” analysts said in a note.
Month-on-month, official data showed core inflation at 0.4%, helped by “downside pressure in core inflation associated to the discount campaign ‘El Buen Fin’,” according to Citi.
The so-called El Buen Fin offered shopping promotions in Mexico and took place from November 13 to 17.
(Reporting by Aida Pelaez-Fernandez and Ricardo Figueroa; editing by Gabriel Araujo and Alistair Bell)
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