World News

Mexican inflation seen having ended 2019 at lowest in over three years: Reuters poll

MEXICO CITY (Reuters) – Mexican annual inflation is forecast to have ended 2019 at its lowest level since August 2016, underpinning expectations the central bank will continue cutting the benchmark interest rate, a Reuters poll showed on Wednesday.

The median forecast of 10 banks, brokerages and analysts was for annual inflation to have closed last year at 2.76%, below the central bank’s inflation target of 3.0%.

The last time annual inflation softened to those levels was in August 2016, when it hit 2.73%.

Compared with the previous month, consumer prices likely rose by 0.50%, according to the survey. The core price index, which strips out some volatile items, was seen rising by 0.41% on the month and by 3.60% compared with the previous year.

The Mexican central bank on Dec. 19 cut its benchmark interest rate to 7.25%, citing softening headline inflation and slack in the economy, but highlighted concern that a recent minimum wage hike could stoke price pressures.

The national statistics agency is due to publish December and full-year 2019 inflation data on Thursday morning.

(Reporting by Miguel Angel Gutierrez in Mexico City and Gabriel Burin in Buenos Aires; Writing by Anthony Esposito; Editing by Chris Reese and Jonathan Oatis)