Mexico City, Mexico — Mexico’s year-on-year inflation accelerated more than expected to its highest level in almost four years. In October, the National Consumer Price Index (INPC) stood at 6.24%, its highest level since December 2017, according to figures released Tuesday by the Instituto Nacional de Estadística y Geografía (Inegi).
Meanwhile, core inflation rose to 5.19% , a level not seen since May 2009.
In September, the Bank of Mexico (Banxico) raised the key rate by 25 basis points to 4.75%. The monetary entity also updated expectations for the consumer price index and projected that it would reach its objective in the third quarter of 2023.
The next monetary policy decision, the penultimate of a total of eight for the year, is scheduled for Thursday. Banxico has a permanent inflation target of 3% plus / minus one percentage point.
“We expect another 25 bp rate hike, to 5.00%, but the chances of further increases in the future are increasing,” said Olivia Cross, analyst at Capital Economics. “We would not be surprised if Banxico revised its inflation forecasts upwards and some members of the Board voted in favor of an increase of more than 50 bp.”
Only in September, consumer prices grew 0.84% , while the underlying index rose 0.49%, noted the National Institute of Statistics and Geography (Ineg).
The increase in the INPC was driven in the month by price increases in some agricultural products, domestic LP gas and electricity rates, which showed the highest price increases.
According to Inegi, the price of onions increased 19.3%, electricity rose by 18%, air transport by 10.2% and domestic LP gas by 8.2%.