In its latest quarterly report, the Central Bank of Mexico highlighted that the pressures come from the non-core items. However, underlying services are worrying as they refuse to decline.

Consumer inflation continued unabated in the first half of June, even accelerating again, according to data released by the National Institute of Statistics and Geography (Inegi).

In the first half of the month, the National Consumer Price Index (INPC) showed a biweekly rise of 0.17%, meaning that annual inflation stood at 4.78%.

Thus, inflation would have accelerated again after reaching 4.59% in the second half of April.

Consumer inflation would continue outside the Bank of Mexico (Banxico) target range of 3% +/-1 percentage point.

Given this performance, analysts expect the central bank to maintain its rate at 11% this week, at its monetary policy meeting.

In its latest quarterly report, Banxico highlighted that the pressures come from non-core items.  However, the underlying services are stubborn to decrease.

The report shows that the underlying portion of services  – which eliminates the price of the most volatile goods and services from its calculation – became the largest pressure.

While core inflation was at 4.17% annually in the first half of June, its services component went to 5.19% and merchandise to 3.33%.

Non-core inflation stood at 6.73% annually. This was explained by a price increase of 8.99% in agricultural products and 4.74% in energy prices, led by tariffs authorized by the government.