Mexico’s Inflation Eases To A 17-Month Low Of 6.85% In March

• Mexico's annual inflation slowed in March by more than expected to 6.85%, the lowest rate in nearly one and a half years, although core price pressures remained elevated, data from national statistics agency INEGI showed on Wednesday, April 5.
• The March reading was the lowest since October 2021 (6.24%), and came in below the consensus forecast of 6.90%, as determined by a Reuters poll. In February, inflation stood at 7.62%.
• However, the measure of core inflation, which strips out some volatile items, slowed less than anticipated to 8.09% from 8.29% the previous month. Analysts had forecast a reading of 8.07%. "Core inflation was impacted by the high readings in services, driven by the seasonal increase in airfares, tourism packages, and food services," Goldman Sachs economist Alberto Ramos wrote in a research note.
• Notably, Banxico has raised rates by 725 basis points since its rate-hiking cycle started in June 2021 to combat inflation. Month-on-month, Mexico's headline consumer price index rose by 0.27%, less than the 0.31% forecast in the Reuters poll.
• The latest data come as leaders of Latin American countries, including Mexico, Chile, Argentina, Brazil, and Colombia, are due to meet virtually to discuss trade measures aimed at combating rising inflation in the region.
• The measures to be proposed include "getting rid of tariffs, eliminating red tape for imports, exports, to ensure sufficient supply and fighting shortages," Mexican President Andres Manuel Lopez Obrador said last month.

(Source: Reuters)