Mexican Inflation Cools More Than Expected in April Alexandra Alper - Reuters
go to original May 7, 2015

Mexico's annual inflation rate eased in April to just above the central bank's 3 percent target partly due to lower electricity costs, even as a slumping peso threatens to push consumer prices higher.

Inflation in the 12 months through April reached 3.06 percent, below the 3.10 percent expected in a Reuters poll, and the 3.14 percent annual rate in March. Price drops for low octane gasoline and tourist packages also helped cool the rate.

At the beginning of the year, Mexico's government lowered electricity rates across the board and vowed not to raise gasoline prices for the remainder of 2015, ahead of local elections.

Like fuel, power rates in Mexico are set by the government, although a sweeping energy reform finalized last year will gradually expose both to market forces in the years to come.

Mexico's annual inflation rate had previously eased after hitting a nine-month high in October, and the central bank has said it expects inflation to end the year below 3 percent amid slack domestic demand.

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