Mexico's Annual Inflation Hits Lowest Since August 2021, Beating Forecasts

Mexico's annual inflation rate slowed in May for a fourth consecutive month to 5.84%, data from statistics agency INEGI showed on Thursday, beating forecasts and continuing a downward trend spurred by a long cycle of rate hikes, Reuters reported. Headline inflation came in below a forecast of 5.90% and is now at its lowest since August 2021. Consumer prices fell 0.22% in May from April, according to non-seasonally adjusted figures, against an expected drop of 0.16%. Nonetheless analysts say future drops in inflation may now be trickier, prompting a delay in rate cuts. Jason Tuvey, Deputy Chief Emerging Markets Economist at Capital Economics said that inflation forecasts remained overly optimistic. "We expect headline inflation to fall further over the coming months. But the strong labour market and rapid wage growth... mean that inflation is likely to stay higher than most anticipate over the next couple of years," he wrote in a note on Thursday. Read more.