Inflation fell in September for the second consecutive month

The national consumer price index (INPC) was below market consensus expectations and inflation slowed in September for the second consecutive month, due to the partial reversal in the prices of agricultural products, data from the Institute revealed. National Statistics and Geography (Inegi).

The INPC advanced 0.05 percent between August and September to reach 4.58 percent annually, the lowest inflation since March 2024, and approaching the upper part of the price stability objective of the Bank of Mexico (BdeM) of between 3 and 4 percent. Inflation accumulated 43 months outside this goal.

The market, according to the latest Citibanamex survey, expected, on average, a monthly variation in September of 0.09 percent of the INPC, equivalent to 4.62 percent annually, below the 4.99 percent annually registered in August.

The fall of more volatile prices; That is, non-core inflation contributed to the slowdown in inflation, as it fell 0.72 percent monthly in September and stood at 6.5 percent annually, after reaching 10.36 percent annually in July.

Agricultural prices fell 1.65 percent monthly, for a variation of 6.76 percent in September compared to the same month of 2023, the lowest since last March; fruits and vegetables fell 3.43 percent monthly and 7.65 percent annually. Meanwhile, energy prices fell 0.19 percent in September and rose 6.92 percent annually.

Thus, tomatoes, with a monthly decline of 17.54 percent, were one of the products with the greatest impact on downward inflation; together with orange, bananas, zucchini, avocado and chayote, with decreases of 20.90, 10.95, 16.06, 7.73 and 20.90 percent, in that order. Professional services and low octane gasoline fell 14.84 and 0.34 percent in September, respectively.

On the other side of the coin, the prices that influenced the rise in inflation in the reference period were own housing, lunch shops, cake shops, inns and taquerias, with increases of 0.28 and 0.51 percent, while lemon and papaya rose 22.23 and 15.28 percent.

Core inflation rose 0.28 percent monthly and 3.91 percent annually, being its lowest variation in 43 months.

He highlighted the increase in educational services, which tend to be updated in August and September.

To the producer

“Inflation in the national month brought joy to the Bank of Mexico and gives them euphoria for a new rate cut in November with a vote of at least four out of five. General and core inflation adjusted downwards.

The underlying enters the upper target range for the first time since the start of the pandemic in 2020, although at a slow speed. Overall, even above the upper limit of 4 percent, the inflationary gain for the rest of the year could be marginalexplained Alfredo Coutiño, director of Moody’s Analytics, an independent firm to the sovereign risk firm.

Despite lower oil prices and maritime freight costs, but possibly reflecting exchange rate depreciation, the national producer price index (INPP), whose objective is to measure variations in the prices of goods and services produced nationally , including oil, grew 0.43 percent at a monthly rate in September and rebounded to 5.11 percent at an annual rate from the previous 4.98 percent.