Mexico's annual inflation slowed in July to its lowest level in more than six years, data from statistics agency INEGI showed on Friday, a day after the central bank held interest rates steady even as it expects price pressures to continue to ease.
Annual inflation in Latin America's second-largest economy hit 3.12% last month, INEGI said, down from 3.37% in June and the lowest since May 2020.
The reading matched expectations from economists in a Reuters poll and remained within the Bank of Mexico's (Banxico) target range of 3%, plus or minus one percentage point.
According to INEGI, consumer prices in July rose 0.03% from the previous month, matching economists' forecasts.
Banxico keeps rates steady as disinflation continues
The data came after Banxico on Thursday kept its benchmark interest rate at 6.5%, extending a pause that began in June, saying that both headline and core inflation were still expected to decline over its forecast horizon but at a slower pace than previously anticipated.
Headline inflation is expected to converge to 3% in the fourth quarter of 2027, according to the bank.
Core inflation, which strips out some volatile food and energy prices, hit 3.95% in the 12 months through July. On a monthly basis, core prices rose . Economists in the Reuters poll had expected readings of and , respectively.
"The key story here is that disinflation remains on track, but the final stage is likely to prove gradual," Pantheon Macroeconomics' chief Latin America economist Andres Abadia said in a note to clients.
"Nothing in today's report changes our policy outlook. Inflation continues to evolve broadly in line with Banxico's expectations, supporting the board's decision to remain on hold," he added.
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