MEXICO CITY Reuters - Mexican consumer prices rose 7.8% in the year through November, a decrease from the previous month to its lowest level since May even as the core index remains a concern, according to data from the national statistics agency INEGI.
Inflation in Latin America's second-largest economy came in less than forecasts, as economists had predicted it to hit 7.93% in November, after standing at 8.41% in the previous month.
This is a good report, said Pantheon Macroeconomics' chief Latin America economist Andres Abadia, noting that headline inflation continued to sluggish due to the lagged effect of tighter financial conditions.
Soaring costs have led Mexico's central bank to push for an aggressive monetary tightening since June 2021 - despite cooling down inflation remains well above the central bank's target of 3% plus or minus 1 percentage point.
The Bank of Mexico will hold its next monetary policy meeting next week, with the benchmark interest rate currently at a record high of 10% after a split decision last month.
Consumer prices increased by 0.58% on a monthly basis in November, as per non-seasonally adjusted figures, which is less than the market consensus of 0.69%.
The core index, which strips out some volatile food and energy prices, was a major concern in the country, rose 0.45% during the month, which was less than forecasts of 0.52%.
That was a deceleration from October when it had increased by 0.63% but was still unlikely to provide full relief, as the 12 month rate came in at 8.51%, above the 8.42% seen in the previous month.
Inflation on the head went up late in Q 3, but core inflation remains relatively sticky. Abadia said that the latter will continue to make Banxico uneasy, as it forecasts a fresh 50 basis-point rate hike next week despite the first signs that core inflation is slowing at the margin.