Mexico's annual inflation accelerated in November, reaching 3.80%, according to figures published by the National Institute of Statistics and Geography (Inegi). The consumer price index rose 0.66% compared with October.
The increase slightly exceeded analysts' expectations, including projections in Citi's latest survey that inflation would finish the month at 3.79%. Analysts expect the Bank of Mexico to cut its key interest rate next week at its final policy meeting of the year.
Core inflation, which excludes volatile items and is closely monitored by the Bank of Mexico, also rose to 4.43%, compared with 4.28% the previous month, as El Economista points out. Within that index, goods increased 4.37% annually and services rose 4.49%, indicating ongoing pressure in the services sector.
Non-core inflation stood at 1.73% annually. Agricultural products rose 0.90%, while energy prices and government-authorized tariffs increased 2.40% compared with November 2023.
Electricity costs registered the largest individual impact on the monthly increase, rising 20.70% due to the end of seasonal subsidies in several states. Tomatoes, serrano peppers, and professional services also posted double-digit monthly increases. Wines, avocados, potatoes, and other items recorded price declines.
Despite the acceleration, inflation remains within the central bank's target range of 3% plus or minus one percentage point. Economists expect the Bank of Mexico to move ahead with a 25-basis-point interest rate cut next week, bringing the benchmark rate to 7.0% at the close of 2025. The median expectation for 2026 remains at 6.50%, according to Citi.
The bank has signaled that slow economic growth may ease pressure on prices. The most recent monetary policy minutes noted that weak momentum — with GDP expected to grow just 0.3% this year — could support disinflation in the months ahead. Some board members anticipate inflation converging to the 3% target by the third quarter of 2026, though core inflation continues to run above the upper range of the bank's goal.
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