Mexico's inflation decelerated to an annual 3.69pc in December, the lowest reading for the month since 2020, mainly driven by slowing agriculture and energy prices, alongside some easing in core inflation.
The consumer price index (CPI) eased from 3.80pc in November, statistics agency Inegi said Thursday, after accelerating from 3.57pc in October. Inflation has trended higher since July, when it stood at 3.51pc — the lowest annual headline reading since December 2020.
The annual figure was down from 4.21pc in December 2024 and marked the lowest year-end reading since 3.15pc in December 2020. The result came in below the 3.6pc forecast by Mexican bank Banamex, "interrupting the upward trend recorded since August, which we anticipate will resume in January." The bank added that full-year inflation for 2025 was below the historical average of 4.4pc.
Core inflation, which excludes volatile food and energy prices, slowed to 4.33pc in December from 4.43pc in November, after accelerating from 4.28pc in October. This marked an eighth consecutive month above 4pc — the upper bound of the central bank's target range. Within core inflation, consumer goods eased to 4.30pc from 4.37pc in November, while services slowed to 4.35pc in December from 4.49pc.
Among the largest contributors to CPI in December, weighted by Inegi, were tourism-related components, particularly airfare and long-distance bus fares ahead of the holiday season.
Non-core inflation decelerated to 1.61pc in December from 1.73pc in November, remaining below 2pc in five of the past six months. Agriculture prices — especially fruits and vegetables — have been subdued this year by favorable weather conditions, although pressures are beginning to build.
Annual inflation for fruits and vegetables contracted by 5.62pc in December, compared with contractions of 7.79pc in November and 10.27pc in October. The segment has faced rising inflationary pressure, Mexican bank Banorte said, driven by extreme rainfall in several states in November and nationwide roadblocks organized by freight truck associations in December.
Energy price inflation slowed to 0.18pc in December from 0.54pc in October and 1.07pc in September. Inflation in the segment has remained contained since President Claudia Sheinbaum in early September renewed an agreement with fuel retailers to maintain a voluntary regular gasoline price cap of Ps24/l ($5.05/USG) for six months.
Looking ahead, Banamex expects an increase in merchandise inflation at the start of 2026 due to higher tariffs and taxes, forecasting headline and core inflation to end 2026 at 4.3pc and 4.2pc, respectively.
