MEXICO CITY, May 4 - A poll of economists indicates that inflation in Mexico probably slowed in April, a development that may give the central bank room to implement what market participants expect will be the last easing move in its multi-year easing cycle.
Poll results
The median response from 12 analysts in the survey projected annual headline inflation at 4.50% for April, down from 4.59% in March. If realized, that reading would interrupt a streak of rising headline inflation that persisted for three months.
On a month-over-month basis, the poll placed the increase in headline consumer prices at 0.25% for April.
Core inflation
Core inflation - which excludes highly volatile items and is considered a clearer gauge of underlying price trends - was also forecast to have eased. The analysts' median estimate put the annual core rate at 4.27% in April, versus 4.45% in March, marking what would be the third straight month of decline for the core measure. The poll additionally estimated a 0.31% monthly increase for core prices.
Timing and policy context
Official inflation figures for April are scheduled for release on Thursday morning, with the data arriving hours before the central bank's monetary policy announcement. Market consensus expects the Bank of Mexico to close out a loosening cycle that began over two years ago by cutting the benchmark interest rate by 25 basis points at its meeting on Thursday.
Outlook and market relevance
The poll's projections, if confirmed by the official data, would align headline and core measures in showing a move toward lower annual inflation rates in April while leaving monthly inflation readings positive. The proximate policy implication reflected in market expectations is a final, modest reduction in the policy rate that would end an extended period of monetary easing.
What to watch
- Thursday morning's official April inflation report for confirmation of the poll estimates.
- The central bank's policy statement and decision later the same day on whether it will enact the anticipated 25 basis-point cut and thereby end the easing cycle.