(Reuters) -Mexican headline inflation persisted in its upward trend for the fifth half-month in a row, above forecasts, according to official data released on Wednesday.
Annual headline inflation in Latin America's second-largest economy hit 4.90% the first 15 days of January, statistics agency INEGI said, up from the 4.66% in December and above the forecasts of 4.78% in a Reuters poll of economists.
Jason Tuvey, Deputy Chief Emerging Markets Economist, said the jump in Mexico’s inflation to a higher-than-expected 4.9% was entirely due to a particularly sharp rise in agricultural goods inflation.
He added "it probably means the chances of Banxico starting an easing cycle at February’s Board meeting are now no better than 50-50."
Pantheon Macroeconomics' chief economist for Latin America, Andres Abadia, said "the key driver of this year’s sharp January increase was perishable-food prices, due to bad weather conditions; a modest increase in energy prices prevented a bigger increase."
Accelerating inflation in November and December led to more careful forecasts at the Bank of Mexico, which has till now held back from reducing Mexico's key interest rate from its current all-time high.
The closely monitored core index, seen as a better gauge of price trends because it strips out volatile energy and food prices, continued to ease and rose 0.25% during the month, while annual core inflation came in at 4.78% in early January, its lowest since August 2021.
Pantheon Macroeconomics' chief economist for Latin America Abadia also added "inflation will continue to fall gradually this year, particularly over H2, but risks remain tilted to the upside, due mostly to bad weather conditions."
A recent Citibanamex survey of economists revealed that a significant portion of the market predicts the Bank of Mexico will commence lowering the key interest rate at its March meeting.