Mexico's Inflation Hits 15-Month Low in January Juan Montes - Dow Jones
go to original February 8, 2013

MEXICO CITY - Mexico's annual inflation continued its easing trend in January, hitting a 15-month low and paving the way for the central bank to possibly cut interest rates.

Twelve-month inflation measured by the consumer price index slowed to 3.25% at the end of January from 3.57% the previous month, Mexico's statistics agency said Thursday. It was the lowest annual rate since the end of October 2011.

Consumer prices rose 0.40% in the first month of the year from December, helped by a fall in fresh food prices and a slowdown in merchandise prices. The increase was above the 0.32% median estimate of 14 economists polled by Dow Jones.

After accelerating in the middle of last year, annual inflation has been continuously easing since last October, moving closer to the Bank of Mexico's 3% permanent target.

With inflation slowing, expectations for an interest rate cut in Mexico are growing after the central bank said in its Jan. 18 policy statement that such a move could be "advisable" to support economic growth if prices kept slowing.

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