Mexican annual inflation unexpectedly ticked higher in the first half of December as a weaker peso threatens to push up consumer prices in Latin America's second biggest economy. Inflation in the 12 months through December 15 accelerated to 4.19 percent from 4.17 percent in November, data from Mexico's national statistics office showed on Tuesday. A reading of 4.13 percent had been forecast.
Consumer prices were up by 0.41 percent compared with the previous two-week period, the figures showed. Core prices, which strip out some volatile food and energy costs, were up 0.21 percent compared with the previous two-week period, and by 3.26 percent on the year. Separately, the statistics office said the economy expanded by 0.59 percent month-on-month in October in seasonally adjusted terms, the strongest monthly growth since April.
Figures for September were also revised slightly higher to show adjusted economic growth of 0.03 percent, compared with the month before. A decline of 0.07 percent had been reported originally. Bill Adams, an economist at PNC Financial Services Group, said in a note to clients that Mexican growth is trending at over 3 percent, mirroring a pickup in the United States, where Mexico sends more than three quarters of its exports.
"The outlook looks good for Mexico in 2015: Mexican domestic demand is improving and the US economy is likewise on track for real GDP growth of more than 3 percent as lower oil prices boost consumer spending power across North America," he said. Mexico's peso currency has recovered a bit after hitting its weakest levels in nearly six years earlier this month, but it has lost almost 12 percent against the US dollar since the start of September. Mexico's central bank, which targets inflation of 3 percent with a one percentage point tolerance zone on each side, cut interest rates to a record low of 3 percent in June to fuel growth.