Mexico’s inflation steadied at 8.7% in the 12 months through September, official data showed on Friday, halting an upward trend that had pushed consumer prices to 22-year highs but still well above the central bank’s target range.
The annual headline inflation rate came in at the same level reported last month, when it had reached its highest since December 2000, and compares to expectations of 8.75% in a Reuters poll of economists.
Even so, consumer prices rose 0.62% in September, according to non-seasonally adjusted figures, reinforcing bets that the nation’s central bank will continue to hike the benchmark interest rate.
“Inflation has halted,” Mexico President Andres Manuel Lopez Obrador said in a regular news conference. “It hit its maximum level and it’s going to start to lower,” he added.
The Bank of Mexico last week raised its key interest rate by 75 basis points to a record 9.25%, citing the “ongoing tightening of global financial conditions” and stating that the balance of risks to inflation’s trajectory remains biased significantly to the upside.
Banxico, as the central bank is known, has raised rates by 525 basis points since the current hiking cycle began in June 2021 in a bid to tamp down inflation, which has blown past the bank’s target of 3% plus or minus 1 percentage point.
“With the (U.S. Federal Reserve) still in a hawkish mood too, the tightening cycle has a bit further to run,” Capital Economics analyst Jason Tuvey said in a note.
Amid the context of soaring consumer prices, Mexico’s government on Monday announced new measures in an anti-inflationary plan made in agreement with food producers and retailers to keep food affordable.
Annual core inflation, which strips out some volatile food and energy prices, reached 8.28%, while in September alone core inflation hit 0.67%, both slightly below market expectations.