In Mexico City, inflation rates saw a significant drop in the first half of February, largely attributed to a decrease in fresh produce prices. This decline has set the stage for potential interest rate cuts by the Bank of Mexico.
Overview of Inflation Numbers
According to data released by the National Statistics Institute, the consumer price index decreased by 0.1% during the initial two weeks of February. Year-on-year, inflation stood at 4.45%, showing a notable improvement from the 4.88% recorded in January. Similarly, the core CPI, excluding energy and fresh produce, also exhibited a positive trend, with a 0.24% increase leading to a 12-month inflation rate of 4.63%.
Factors Driving the Inflation Deceleration
A key contributing factor to the drop in consumer prices was the significant 7.2% decrease in fruit and vegetable prices observed in the first half of February.
Potential Rate Cuts Ahead
Given this deceleration in inflation rates, market experts anticipate that the Bank of Mexico will initiate reductions in its benchmark interest-rate target starting in March. The central bank had maintained the rate at 11.25% during its meeting on Feb. 8, hinting at possible rate cuts in the upcoming sessions depending on inflation trends.
Upcoming Developments
Investors and analysts are eagerly awaiting the publication of the minutes from the February meeting, scheduled for Thursday.
For more information and updates on economic developments in Mexico, stay tuned for further insights.