Central Bank Reports January-June Inflation at 2.63 Percent

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The latest monthly inflation report from the Banco de Mexico (central bank) showed consumer prices were higher than expected during June, mainly because of higher costs for agricultural products and electricity.

The central bank reported an increase of 0.49% in the consumer price index (Indice Nacional de Precios al Consumidor, INPC) for June, slightly higher than the 0.40% to 0.44% increase forecast by several private analysts. This brought accumulated inflation for January-June to 2.63%, outpacing the 2.11% increase reported in the first six months of 2001.

The central bank's report on June is the last that will be based on an index developed in 1994. Starting with the second half of June and every half and full month thereafter, the Banco de Mexico will use a new index that adds 36 new items. The new index is intended to better reflect Mexico's consumer patterns (see SourceMex, 2002-05-15).

Analysts said the higher-than-expected June INPC was also influenced by a strong peso, which could have a bearing on monthly inflation rates the rest of the year. If this is the case, the government will have difficulty meeting its target for annual inflation of 4. …