Mexico’s headline inflation likely rebounded in early March: Reuters poll

By Thomson Reuters Mar 20, 2024 | 4:16 PM

MEXICO CITY (Reuters) – Mexican headline inflation likely accelerated in the first half of March, a Reuters poll showed on Wednesday, supporting bets that while the central bank may cut its key interest rate this week, it will not start an aggressive easing cycle.

Annual headline inflation is forecast at 4.45% for the first half of March, up from 4.35% at the end of last month but well below the two-decade high of 8.77% clocked in the second half of August 2022, according to the median forecast of 11 analysts.

The slight rise in inflation is forecast on the back of higher prices for agricultural products and the seasonal effects of Easter tourism services.

The closely watched core index, which strips out some highly volatile energy and food prices, is forecast at 4.62% in early March, in what would be its lowest level since June 2021.

Mexico’s central bank is expected to announce on Thursday its first rate cut since kicking off a monetary tightening cycle in mid-2021 that brought the interest rate to its current record-high of 11.25%, according to another Reuters poll.

Some of the Bank of Mexico’s five board members have recently hinted that rate cuts could be on the table depending on progress made in taming inflation.

Compared to the previous two weeks, analysts estimated headline inflation rose 0.28%, while core inflation was up 0.26%.

Mexico’s national statistics agency will publish official inflation data for the first two weeks of March on Friday.

(Reporting by Noe Torres; Additional reporting by Gabriel Burin in Buenos Aires; Editing by Josie Kao)