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Inflation in Mexico stands at 4.09 pct annually in mid-October

Xinhua News,MEXICO CITY
2020-10-23 04:56

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MEXICO CITY, Oct. 22 (Xinhua) -- Inflation in Mexico stood at 4.09 percent annually up to mid-October, driven largely by an end to electricity subsidies in parts of the country, the National Institute of Statistics and Geography (Inegi) said on Thursday.

The National Consumer Price Index (INPC) rose 0.54 percent in the first two weeks of October compared to the previous two-week period, Inegi said in a statement.

In the same period of 2019, that index rose 0.40 percent biweekly and inflation stood at 3.01 percent annually, the independent statistics body said.

The central bank of Mexico (Banxico) has set an inflation target of 3 percent with a one percentage point margin of flexibility.

Core inflation, the parameter in Banxico's monetary policy decisions, was 0.14 percent in the first half of October and 4.0 percent annually.

In the first half of October, electricity rates increased 18.66 percent against the previous period, while the price of tomatoes, a dietary staple here, rose by 14.41 percent in the same period. Both items weigh the most on the INPC.

In a report issued separately, the Banorte Financial Group forecast year-end inflation of 3.7 percent, with some upward risks, but without changes to the benchmark interest rate.

"We reiterate our expectation that the central bank will remain cautious, keeping the benchmark rate unchanged at 4.25 percent" when it meets on Nov. 12 to decide the matter, Banorte said.

"We see some challenges ahead, so our base case is that the cycle of loosening (monetary policy) is over, with the rate remaining at 4.25 percent in 2021," Banorte added.

Mexico ended 2019 with inflation at 2.83 percent, its lowest level since the end of 2016 and the second lowest rate on record for the end of a year.
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