Mexico | YoY headline inflation volatility kicks in driven by the rebound in energy prices

Summary

We expect headline inflation to post a 0.00% HoH change in the first half of May, thereby increasing to 2.5% YoY from 2.2% in the second half of April. We anticipate a 0.09% HoH core inflation increase (3.60% YoY, unchanged from 3.61% in the previous fortnight).

Key points

• Key points:
• Our preliminary estimates for May are 0.23% MoM (2.68% YoY) for headline inflation, and 0.18% MoM (3.52% YoY) for core inflation
• Energy and food prices supply shocks have added volatility to annual headline inflation, but once energy prices stabilize and bottlenecks in food distribution wane out, structurally weak demand will dominate

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