Mexico's inflation accelerated to an annual 3.79pc in January, driven by lighter-than-expected hikes from new and higher taxes introduced at the start of 2026 and faster core inflation.
The consumer price index (CPI) picked up from 3.69pc in December, statistics agency Inegi said Monday, after slowing from 3.80pc in November. Inflation has trended higher since July, when it stood at 3.51pc — the lowest annual headline reading early 2020.
The result came in below the 3.83pc median forecast in Citi Research's 4 February bank analysts survey, which Mexican bank Banorte said was "positive, especially considering the period's unfavorable seasonality and fiscal adjustments that impacted several goods."
Core inflation, which excludes volatile food and energy prices, sped to 4.52pc — its highest level since March 2024 — from 4.33pc in December, marking a ninth consecutive month above 4pc, the upper bound of the central bank's target range. Within core inflation, consumer goods accelerated to 4.56pc from 4.30pc in December, reflecting the bulk of revised excise taxes on tobacco, soft drinks and other items, while services sped to 4.48pc in January from 4.35pc the previous month, mainly from education and housing inflation.
The central bank cited "the higher-than-anticipated trajectory for core inflation" in raising its inflation estimates for the next four quarters with its 5 February decision to pause the current rate cut cycle in the target rate to 7.0pc.
Non-core inflation decelerated to 1.39pc in January from 1.61pc in December, remaining below 2pc in six of the past seven months. Agriculture prices — especially fruits and vegetables — were subdued through 2025 by favorable weather conditions caused by the La Nina weather climatological phenomenon.
While La Niña persists for now, NOAA's Climate Prediction Center gives a 75pc probability ENSO will transition into a neutral position by March, with rising chances for negative impacts on Mexican agriculture, especially if this evolves into an El Niño event during the mid-year growing season.
Annual inflation for fruits and vegetables contracted by 1.84pc in January, compared with contractions of 5.62pc in December and 7.79pc in November.
Energy price inflation contracted by 1.16pc in January from a gain of 0.18pc in December. Inflation in the segment has remained contained under an agreement with fuel retailers to maintain a voluntary regular gasoline price cap of Ps24/l ($5.29/USG).
Mexican president Claudia Sheinbaum has said the agreement will be reviewed for renewal every six months, setting the next review to occur in March.
