By Anthony Harrup
MEXICO CITY--Mexican inflation picked up in February from the previous month, led by increases in energy prices and moving the annual rate further from the central bank's 3% target.
The consumer price index rose 0.63% from January, and was up 3.76% from a year before compared with an annual rate of 3.54% at the end of January, the National Statistics Institute said Tuesday.
Energy costs rose 3.47% last month on higher gasoline and propane gas prices. That was partially offset by a drop in fresh fruit and vegetable prices.
Core CPI, which excludes energy and agricultural products, rose 0.39% in February and was up 3.87% from a year earlier, compared with an annual rate of 3.84% in January. Core goods prices continued to outpace those of services amid continued restrictions in some places over the coronavirus pandemic.
A majority of analysts polled last week by Citibanamex expect the Bank of Mexico to cut the overnight interest-rate target to 3.75% from the current 4% at its March 25 monetary policy meeting, although several have recently dropped their call for a reduction. Citi Research cited a weakening of the Mexican peso against the dollar, a rise in local long-term yields and higher financial and inflation risks in changing its view.
Last week, the Bank of Mexico increased its 2021 economic growth forecast to 4.8% from 3.3%, and also raised its estimates for inflation this year, raising doubts about another interest-rate cut this month.
"Everything is possible at the next meeting, holding at 4% or another 25 basis-point cut, but in our assessment the bar for another cut in March is high," Goldman Sachs said in a report.
Write to Anthony Harrup at anthony.harrup@wsj.com
(END) Dow Jones Newswires
03-09-21 0759ET
