Mexico's Central Bank May Delay Further Rate Cuts as Core Inflation Accelerates, Says Scotiabank

11:48 AM EDT, 07/09/2025 (MT Newswires) -- Mexican annual headline inflation eased to 4.32% year over year in June, down from 4.42% in May, although it came in marginally above market expectations of 4.30%, said Scotibabank.

In contrast, core inflation -- which excludes volatile items such as energy and agricultural products -- accelerated to 4.24% year over year from 4.06%, surpassing the 4.21% consensus.

Within the core component, goods prices continued their upward trajectory, rising to 3.91% year over year versus 3.67% previously, while services inflation increased from 4.49% to 4.62%, reflecting persistent price pressures in the economy.

On a monthly basis, headline inflation rose 0.28%, in line with the previous month and slightly above the 0.27% forecast in Citi's survey. Core inflation increased 0.39%, up from 0.30% in May and above the 0.36% consensus.

Looking ahead, core inflationary pressures are expected to persist, despite signs of an economic slowdown, stated the bank.

This dynamic could further delay the central bank's (Banxico) rate cuts in the coming months, although Scotiabank still expects a 25 basis point cut in the August policy meeting.

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