Mexican inflation seen having ended 2019 at lowest in over three years: Reuters poll

MEXICO CITY (Reuters) – Mexican annual inflation is forecast have ended 2019 at its lowest level since August 2016, underpinning expectations the central bank will continue cutting the benchmark interest rate, Reuters poll showed Wednesday.

The median forecast of 10 banks, brokerages and analysts was for annual inflation to have closed last year at 2.76%, below the central bank’s inflation target of 3.0%.

The last time annual inflation softened to those levels was in August 2016, when it hit 2.73%.

Compared with the previous month, consumer prices likely rose by 0.50%, according to the survey. The core price index, which strips out some volatile items, was seen rising by 0.41% on the month and by 3.60% compared with the previous year.

The Mexican central bank on Dec. 19 cut its benchmark interest rate to 7.25%, citing softening headline inflation and slack in the economy, but highlighted concern that a recent minimum wage hike could stoke price pressures.

The national statistics agency is due to publish December and full-year 2019 inflation data on Thursday morning.

(Reporting by Miguel Angel Gutierrez in Mexico City and Gabriel Burin in Buenos Aires; Writing by Anthony Esposito; Editing by Chris Reese and Jonathan Oatis)

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