Mexico: Inflation hits 15-month high on fresh produce prices

Rises in the prices of fruits and vegetables -as well as other goods- pushed Mexico’s annual inflation to its highest level in 15 months in August. It came out about half a percentage point above the rate the Finance Ministry says it will fall to by the end of the year.

Consumer prices rose 4.05% in the year through August, the highest since a reading of 4.28% in May 2019, the national statistics agency said on Wednesday.

According to deputy Governor Jonathan Heath, Mexico’s Central Bank, which holds its next monetary policy meeting on Sept. 24, still has space for further rate cuts. The Central Bank, which has cut its benchmark lending rate by 375 basis points since August last year to 4.5%, targets consumer price inflation of 3%, with a one percentage point tolerance band above or below that figure.

The finance ministry on Tuesday said inflation would end the year at 3.5% in its 2021 budget proposal delivered to Congress. reported that, compared with the previous month, prices increased 0.39% in August, including a 2.97% jump in fruit and vegetable prices. The core price index, which strips out some volatile elements, rose 0.32% on the month.

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