Mexican Inflation Slows Further in Early October

Mexico's inflation slowed in the first half of October, retreating further from August's peak as a drop in prices of agricultural produce partly offset a seasonal jump in energy costs.

The consumer-price index rose 0.62% in the first two weeks of the month, pushing the annual rate down to 6.30% from 6.35% at the end of September, the National Statistics Institute said Tuesday.

Core CPI, which excludes energy and fresh fruit and vegetables, rose 0.21%, slowing the 12-month rate to 4.75% from 4.80%.

Inflation slowed for a second consecutive month after reaching a 16-year-high of 6.66% in August, supporting the central bank's decision to stay on hold at its two previous policy meetings after a prolonged cycle of interest-rate increases.

The Bank of Mexico expects consumer prices to continue easing this year, and that inflation will return to its 3% target toward the end of 2018.

Residential electricity rates contributed the most to inflation in early October as summertime subsidies in 15 cities, designed to help consumers deal with air-conditioning costs, came to an end.

Public transport and telecommunications costs rose after a decline following a deadly earthquake in September, when the Mexico City government waived fares on the city's subway system and the country's telecommunications companies made phone calls, messaging and mobile data free so that even people without credit on their phones could communicate.

Agricultural prices fell 1.52% in the first two weeks of October, and overall food-and-beverage costs were down 0.63%. Processed food prices rose a modest 0.16%.

Write to Anthony Harrup at

(END) Dow Jones Newswires

October 24, 2017 10:02 ET (14:02 GMT)