Mexico's Headline Inflation Up in December, Core Rate Down

• Mexico's headline inflation accelerated for the second month in a row in December while the closely watched core rate maintained its downward trend, official data showed on Tuesday.
• Annual headline inflation in Latin America's second-largest economy hit 4.66% in December, statistics agency INEGI said, overshooting the 4.55% expected by economists polled by Reuters and up from 4.32% in the previous month.
• The breakdown of the data showed that last month’s rise in the headline rate was due to stronger non-core inflation. Specifically, a spike in agricultural prices, with fruit and vegetable inflation hitting a two-year high.
• That said, core inflation, which strips out some volatile energy and food prices, posted its 11th consecutive monthly decline. The annual rate hit its lowest since September 2021 at 5.09%.
• Mexico's central bank has maintained a "slightly hawkish" posture in its monetary policy. It intends to sustain its key interest rate at a record peak of 11.25% while it waits for inflation to go back to the target of 3%, plus or minus one percentage point.
• "This was a poor end to the year," Pantheon Macroeconomics' Chief Latin America Economist Andres Abadia expressed, but added the general inflation picture continues to improve at the margin, and he expected headline and core inflation to decline consistently over the coming months.

(Source: Reuters)