MEXICO CITY (Reuters) – Mexican annual inflation likely eased in the first half of April to its lowest in more than four years, a Reuters poll showed, giving the central bank more space to maneuver and cut rates to limit economic damage from coronavirus disruptions.
With the prices of energy and agricultural products declining, the median forecast of 11 analysts and economists was for inflation to have dipped to a rate of 2.16% in the first half of April, from 2.79% in the second half of March. MXCPHI=ECI
If the inflation forecasts prove to be correct, the rate would touch its lowest level since December 2015, when inflation stood at 2%.
Mexico’s central bank on March 20 announced its biggest rate cut in six years in an out-of-cycle move, and pledged support for the financial markets as part of more aggressive measures to cushion the economy from the coronavirus fallout.
After cutting the benchmark interest rate 50 basis points to 6.50%, Mexico’s central bank said there was heightened uncertainty about the inflation outlook, with risks both on the downside and the upside, along with increased slack in the economy.
During the first 15 days of April, consumer prices were forecast to have fallen 0.63%, according to the survey. The core price index, which strips out some volatile items, was seen rising 0.16%. <MXCPIF=ECI> <MXCPIH=ECI>
Annual core inflation was forecast at 3.36%. <MXCPIC=ECI>
The national statistics institute will publish inflation figures for the first half of April on Thursday.
(Reporting by Reporting by Miguel Angel Gutierrez in Mexico City and Gabriel Burin in Buenos Aires; Writing by Drazen Jorgic; Editing by Steve Orlofsky)