Consumer Prices in Mexico Rose Less Than Forecast in December - Bloomberg Brendan Case - Bloomberg
go to original January 8, 2015

Mexican consumer prices rose less than expected in December, bringing the annual inflation rate to its lowest since July.

Prices increased 0.49 percent in the month, the national statistics institute said on its website today, compared with the 0.51 percent median forecast of 19 economists surveyed by Bloomberg. The annual inflation rate fell to 4.08 percent, down from 4.17 percent in November. Banco de Mexico targets inflation of 3 percent, plus or minus one percentage point.

The December report shows “no evidence” that the recent depreciation of the peso against the dollar is causing inflation to accelerate by boosting import prices, Carlos Capistran, chief economist for Mexico at Bank of America Corp., said in a note to clients today. The Mexican currency dropped 5.6 percent against the dollar in December, the biggest monthly decline in more than two years.

“Inflation will look good in 2015 despite the peso depreciation,” said Capistran, who correctly forecast the December rise in consumer prices and estimates a 3.5 percent inflation rate for this year. “We don’t see a need for Banxico to hike rates soon based on our inflation expectations.”

The peso strengthened 0.4 percent to 14.6623 per U.S. dollar at 8:56 a.m. in Mexico City. The currency fell to the lowest since March 2009 on Jan. 5.

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