Bloomberg News

Mexican Prices Rise Fastest in 12 Years in Early November

November 25, 2011

(Updates with economic growth in third paragraph.)

Nov. 24 (Bloomberg) -- Mexico’s consumer prices rose 0.97 percent in the first half of November, the fastest pace since January 1999, the national statistics institute, or Inegi, said.

Core prices, excluding food and energy, climbed 0.25 percent over the same period, Inegi said on its website today. Economists expected prices to rise 0.74 percent and core prices to gain 0.15 percent, according to the median estimates from 16 analysts surveyed by Bloomberg. Electricity costs leaped 22.07 percent as seasonal subsidies were removed, Inegi data showed.

Mexico’s economy expanded 4.5 percent in the third quarter, easing pressure on the central bank to cut the benchmark 4.5 percent overnight rate in December, said Banco Santander SA’s Rafael Camarena in a Nov. 22 interview. Economists have been scrapping their calls for an interest rate cut in December in recent weeks as the peso registered a 17 percent depreciation against the dollar since Aug. 1.

Mexico’s central bank said in the minutes to its Oct. 14 monetary policy meeting that it is willing to cut interest rates, although a sustained depreciation by the peso may fuel inflation and require a more restrictive stance.

Policy makers, who next meet on Dec. 2, have a long-term inflation target of 2 percent to 4 percent. Consumer prices rose 3.2 percent in October from the year earlier.

Slowing global growth had led economists to reduce their estimates for inflation. Prices will rise 3.32 percent this year, according to a in a bi-weekly analysts’ survey published Nov. 17 by Citigroup Inc’s Banamex unit, compared with 3.39 percent in the previous survey. The economists cut their predictions for 2012 inflation to 3.57 percent from 3.6 percent.

--Editors: Philip Sanders, Harry Maurer

To contact the reporter on this story: Nacha Cattan in Mexico City at

To contact the editor responsible for this story: Joshua Goodman at

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