Inflation reached 4.58% annually in September; slowed for second month

Mexico City. The national consumer price index (INPC) was below market consensus expectations and inflation slowed in September for the second consecutive month, revealed data from the National Institute of Statistics and Geography (Inegi).

Specifically, the INPC advanced 0.05 percent between August and September of this year and 4.58 percent in the last 12 months, the lowest inflation since March 2024 and approaching the upper part of the price stability objective of the Bank of Mexico between 3 and 4 percent, accumulating 43 months outside that range.

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, core inflation contributed to the slowdown in inflation, as it fell 0.72 percent monthly in September and stood at 6.50 percent annually.

Agricultural prices fell 1.65 percent monthly for a variation of 6.76 percent in September compared to the same month in 2023; 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, tomato, with a monthly decline of 17.54 percent, was one of the products with the highest incidence of downward inflation, along with oranges, bananas, zucchini, avocado and chayote, with decreases of 20.90, 10.95, 16.06 and 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, loncherías, 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.

For its part, and in monthly variation, inflation without volatiles; That is, the underlying, rose 0.28 percent monthly in September and 3.91 percent, being its lowest variation in 43 months.

“The inflation of the national month brought joy to Banco de México and gives them euphoria for a new rate cut in November with a vote of at least four out of five. Both inflation, general and core, were adjusted downwards. The general decreases mainly due to the non-core.

“While the underlying enters the upper target range for the first time since the start of the pandemic in 2020, although at a slow speed. In general, even above the upper limit of 4 percent, the inflationary gain for the rest of the year could be marginal,” explained Alfredo Coutiño, director for Latin America at Moody’s Analytics, an independent firm of the sovereign risk firm.

To the producer

The national producer price index (INPP), whose objective is to measure the variations in the prices of goods and services produced nationally, including oil, grew 0.43 percent at a monthly rate in September and 5.11 percent at an annual rate. . In the same month of 2023, it increased 0.31 percent at a monthly rate and 0.58 percent at an annual rate.

By groups of economic activities, at a monthly rate, the prices of secondary education increased 0.42 percent and those of tertiary education increased 0.72 percent. Those of primary activities decreased 1.09 percent.

The index of intermediate use goods and services, including oil, fell 0.24 percent at a monthly rate and rose 3.73 percent at an annual rate.

In the reference month, the index of final goods and services, including oil, rose 0.69 percent at a monthly rate and 5.64 percent at an annual rate.