By Anthony Harrup
MEXICO CITY--Mexico's annual inflation rate rose to its highest level in more than three years in mid-April as the effects of last year's slump in world oil prices waned.
The consumer price index rose 0.06% in the first two weeks of April, compared with a decline of 0.72% in the first half of April 2020 when widespread shutdowns in the early days of the coronavirus pandemic led to a sharp drop in energy prices.
The 12-month CPI rate rose to 6.05% from 4.67% at the end of March, reaching its highest level since December of 2017.
Energy costs, including gasoline and propane gas, fell 2.3% in the first two weeks of this month but were 28% higher than they were a year before, the National Statistics Institute said Thursday.
Electricity rates fell from March with the start of summertime subsidies for residential users, and tourism services and airfares were lower following the busy Easter week, but food prices rose.
Core CPI, which excludes energy and agricultural products, rose 0.18% and was up 4.13% from a year before.
The recent spike in inflation, which is expected to ease in the coming months, kept the Bank of Mexico from cutting interest rates at its March 25 meeting.
The central bank voted unanimously to leave its overnight interest rate target unchanged at 4%, although a majority of the five board members considered that further reductions may be possible once inflation recedes.
Despite that, most of the banks polled this week by Citibanamex expect the overnight rate to remain at 4% for the rest of this year. Inflation is projected to end the year at 4.2%, according to the survey.
Write to Anthony Harrup at anthony.harrup@wsj.com
(END) Dow Jones Newswires
04-22-21 0756ET
