In brief
Russia's annual inflation rose sharply to 3.75 % in October, up from 3.57 % a year earlier. Electricity and airfares were the strongest contributors, while core inflation edged higher at 3.80 %. Scenarios for 2026‑27 from Banamex and other analysts sketch possible future paths, but several risks, from wage pressures to weather events, remain unresolved.
Mexico’s annual inflation accelerated to 3.75 percent in October, a 0.18‑point jump from the 3.57 percent rate recorded in the same month last year, according to data released on Monday by the National Institute of Statistics and Geography (INEGI). The monthly consumer price index rose 0.65 percent, above the 0.36 percent increase seen in November 2025, and the annual headline rate rose from 3.57 percent to 3.75 percent.
Core inflation, which excludes volatile items such as food and energy, climbed 0.34 percent month‑on‑month and 3.80 percent year‑on‑year. The core rate sits at the upper edge of the Bank of Mexico’s target of 3 percent plus or minus one percentage point.
The rise was largely driven by electricity rates, which increased 18.51 percent, and airfares, which jumped 26.36 percent. Agricultural items also contributed, with tomato prices up 9.68 percent, while utilities overall added 3.60 percent to the CPI, according to data from Trading Economics. Mexico News Daily listed green tomatoes at 35.58 percent, pumpkin at 23.22 percent, and electricity again at 18.51 percent as key contributors.
Banamex, a private bank, noted that October’s headline inflation represented the largest month‑to‑month increase since 2021. In a separate outlook, the bank forecast that annual headline inflation could reach 3.9 percent and core inflation 3.7 percent by the end of 2026, while maintaining its 2027 forecasts for both measures at 3.9 percent. Banamex highlighted several upside risks to inflation, including a stronger pass‑through of minimum‑wage hikes to other wages and the potential for intensified El Niño weather patterns, which could further inflate commodity prices.
The Bank of Mexico has kept its policy rate steady as it monitors these developments, noting that the current inflation trajectory remains within its 3 ± 1 percent band.
Other analysts echoed the surprise in the inflation figure. Bloomberg reported that Mexico’s annual CPI rose greater than expected to 3.75 percent, with core inflation at 3.80 percent versus an estimate of 3.78 percent. The market’s consensus had anticipated a slightly lower headline rate.
While the headline numbers suggest a moderate uptick, several sources note enduring uncertainties. These include whether wage increases will translate fully into consumer spending, the extent of further strain from potential El Niño impacts, rising international fertilizer costs that could lift fruit and vegetable prices, and the degree to which currency depreciation may feed through to non‑food goods. Each of these factors presents a potential catalyst that could either stall or accelerate the inflation trend in the coming months.
