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Goldman Sachs See CPI As Reducing Urgency to Commence Easing Cycle

MEXICO
  • Goldman Sachs write that Mexico’s non-core inflation rose more than expected, impacted by the large increase in perishable food prices.
  • Core-goods inflation, however, continues to moderate and the gap with sticky services inflation has now closed and reversed.
  • They conclude that food prices, a positive output and labor market gap, and double-digit wage growth are sources of near-term upside risk to inflation.
  • This backdrop, combined with rising non-core inflation pressures and high and sticky services inflation likely reduces the urgency for the central bank to initiate an easing cycle.

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