Overall inflation in Mexico could rise and core inflation could slow

On Thursday, inflation data for the first half of December from the Statistical Institute of Mexico is expected to be released.

Mexico's overall inflation rate has slowed for six consecutive periods. According to predictions, it rose in the first half of December. Results of a Reuters survey showed that expectations of continuation of interest rate hikes by the Bank of Mexico (Banxico) remain.

Overall annual inflation is 7.46%. The median forecast assumes that it will rise to 7.80%, and annual core inflation will fall slightly to 8.34% from 8.37%.

The core index excludes volatile food and energy prices. It is considered the best indicator to monitor inflation. According to predictions, it rose by 0.56% in the first half of the month compared to the previous half-month period. It is expected that overall inflation will rise by 0.40% over the same period.

The annual inflation target is 3% +/- 1%. Its actual value remains much higher. Last week, the key rate was raised to 10.50%. This was the 13th consecutive increase by the central bank, which pointed to the need for at least one more increase.