MEXICO CITY (Reuters) – Mexico’s headline inflation likely slowed in the first half of May to its lowest level in 19 months, a Reuters poll on Tuesday showed, backing views of a sustained decline in consumer prices and that the central bank will keep its benchmark rate on hold.
The median forecast of 13 analysts sees annual headline inflation at 6.15%, the lowest since the first half of October 2021. Still, that is far above the Bank of Mexico’s inflation target rate of 3%, plus or minus a percentage point.
The core index, which strips out volatile food and energy products, is forecast to have slid to 7.49% year-on-year, marking the seventh consecutive fortnight of declines.
Banxico, as the Mexican central bank is known, kept its benchmark interest rate steady at 11.25% last week in a unanimous decision, breaking a nearly two-year rate-hike cycle.
The bank forecast inflation would reach its 3% target in the fourth quarter of 2024 and suggested it would need to maintain the key interest rate at current levels for an extended period.
In the first half of May, consumer prices were forecast to have slipped 0.19% from the previous two-week period, while the core index likely rose 0.21%.
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Mexico’s statistics institute will release inflation data for the first half of May on Wednesday.
(Reporting by Noe Torres; Additional reporting by Gabril Burin in Buenos Aires; Editing by Richard Chang)