By Aida Pelaez-Fernandez and Noe Torres
MEXICO CITY, Sept 9 (Reuters) - Mexico's annual inflation rate accelerated for the first time in five months in August, official data showed on Wednesday, backing up a cautious monetary policy approach by the country's central bank.
Consumer prices in Latin America's second-largest economy rose 3.26% in the year through August, accelerating from a 3.12% increase in July. Economists forecast in a Reuters poll a 3.3% increase.
"Persistent services inflation and
the risk of further temporary shocks — including El Niño and geopolitical disruptions — give policymakers little reason to resume easing soon," Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said in a note to clients.
Food-price shocks could keep headline inflation volatile over the next few months, Abadia added.
Bank of Mexico Deputy Governor Jonathan Heath last week said the central bank should not cut interest rates again in the short term and suggested any further easing may be about a year away.
In August alone, consumer prices increased 0.20%, following a 0.03% increase the prior month, according to non-seasonally adjusted figures. Economists expected a 0.25% rise.
Mexico's government updated its inflation forecasts in a draft budget proposal submitted to Congress late Tuesday. It sees inflation ending 2026 at 3.5% and at 3.0% by the end of 2027.
CORE PRESSURES EASING
The closely watched core index, which strips out some volatile food and energy prices, rose 0.16% during the month, below a 0.20% market forecast and down slightly from the 0.23% recorded the previous month.
The annual core rate stood at 3.88%, also slowing from the 3.95% registered in July and below expectations of a 3.93% increase.
(Reporting by Aida Pelaez-Fernandez and Ricardo Figueroa; Additional reporting by Noe Torres; Editing by Chizu Nomiyama and Andrea Ricci )
