Mexico's pace of consumer price increases moderated in April, official figures released Thursday showed, offering fresh evidence that inflationary pressures may be cooling.
Headline consumer prices rose 4.45% in the 12 months through April, a slowdown from the 4.59% year-on-year increase recorded in March. That outcome came in slightly below the median forecast from a Reuters poll, which had projected a 4.50% rise.
The central measure of inflation closely watched by policymakers - the core index, which excludes volatile items - also decelerated. Core inflation eased to 4.26% in April from 4.45% in March, a touch under the 4.27% expected by economists surveyed by Reuters.
The release comes ahead of a scheduled monetary policy decision later Thursday by Mexico's central bank, Banxico. Policymakers had reduced the benchmark interest rate by 25 basis points in March, bringing it to 6.75%.
Market participants have broadly interpreted the recent inflation trajectory as supportive of further easing and expect Banxico to complete the current easing cycle with a final 25-basis-point cut to the benchmark rate. That cycle began more than two years ago and, if concluded as markets expect, would mark the end of a lengthy period of monetary accommodation.
Despite the moderation, inflation remains above the central bank's stated objective of 3%, plus or minus a percentage point. That means year-on-year inflation is still outside the symmetric target range, a factor that will figure into the deliberations at the upcoming policy announcement.
In sum, the April data indicate a slowing trend in both headline and core inflation that may give policymakers room to consider additional easing. However, inflation's position above the target range ensures the decision later Thursday will be scrutinized closely by markets and economic agents alike.