Mexico’s annual inflation rate eased to 3.12% in July from 3.37% in June, reaching its lowest level since May 2020 and in line with market expectations. This latest reading brings inflation closer to Banxico’s 3% target, which has a tolerance band of ±1 percentage point.
The slowdown in price growth was broad-based. Notable decelerations were seen in food and non-alcoholic beverages (0.78% vs. 1.66% in June), housing and utilities (3.23% vs. 3.34%), and transportation (3.21% vs. 3.36%). Energy inflation also edged down to 1.16% from 1.39%, while services inflation moderated to 4.36% from 4.49%, though it remains relatively high.
More moderate price increases were also observed in alcoholic beverages and tobacco (7.34% vs. 7.66%), insurance and financial services (6.41% vs. 6.74%), restaurants and hotels (6.37% vs. 6.63%), education services (5.91% vs. 5.93%), healthcare (4.80% vs. 4.84%), and recreation, sport, and culture (3.63% vs. 3.73%).
The annual core inflation rate declined to 3.95%, its lowest level since April 2025. On a monthly basis, the consumer price index (CPI) was virtually unchanged.
