Mexico's inflation accelerates in line with expectations in August

By Aida Pelaez-Fernandez

MEXICO CITY, Sept 9 (Reuters) - Mexico's annual inflation rate accelerated in August, official data showed on Tuesday, meeting expectations and remaining within the central bank's target range for the second month in a row.

Consumer prices in Mexico rose 3.57% in the year through August, the national statistics agency INEGI said. The data came in line with economists' forecasts in a Reuters poll and up from 3.51% the previous month.

Mexico's central bank, also known as Banxico, has an inflation target of 3%, plus or minus a percentage point.

"The August consumer price index does not prevent the Bank of Mexico from meeting its forecast and implementing another 25 bp cut, to 7.5%, in its next announcement on September 25," Capital Economics said in a note.

Analysts at local firm Banorte expect annual inflation to decelerate and end 2025 at 4%. Particularly, the economic slowdown will have a greater-than-expected impact on prices, they said in a note.

On the other hand, "risks stem from goods-price rebounds, trade restrictions in textiles and footwear, and weather shocks, though recent rains have improved crops," said Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.

In August alone, consumer prices rose 0.06%, according to non-seasonally adjusted figures, while the closely watched core index, which strips out some volatile food and energy prices, rose 0.22%. Both were roughly in line with market forecasts.

Monthly figures were affected by a seasonal increase in education prices, as kids in the country prepared to go back to school after their summer vacation.