2026/07/09 | Julia Passabom & Mariana Ramirez
Bi-weekly CPI for 2H June printed at -0.20%, undershooting both consensus (+0.04%) and our forecast (+0.07%). Core inflation rose 0.02%, also below expectations (consensus: +0.16%; Itaú: +0.16%). Within core, tradables increased 0.04%, with food prices up 0.14% and non-food prices down 0.04%, mainly driven by apparel, footwear, and accessories. Core services were unchanged, reflecting deflation in other services—including air transportation, hotels, and tourism-related services—likely due to softer demand following the World Cup. Housing, however, continued to exert upward pressure, partially offsetting weakness elsewhere in the component. Non-core prices fell 0.95%, driven primarily by declines in agricultural products (notably tomatoes and chili peppers), livestock products (eggs and chicken), and LP gas.
On an annual basis, headline inflation eased to 3.18% in 2H June, remaining within Banxico’s target range and reaching its lowest level since 2H December 2020. Core inflation declined to 3.94%, falling below 4.0% and marking its lowest reading since April 2025. Tradable inflation decreased to 3.45% (from 3.65%), while services inflation fell to 4.40% (from 4.57%). On a three-month seasonally adjusted annualized rate (3m SAAR) basis, core inflation remained broadly stable at 3.70% in June, with tradables at 2.43% and services at 4.72%, highlighting persistent stickiness in services despite some moderation in housing inflation.
Our take: The release reinforces the gradual disinflation trend, largely driven by goods prices, which continue to benefit from MXN strength. Meanwhile, the decline in other services appears to reflect temporary factors rather than a meaningful shift in the underlying trend. We maintain our year-end inflation forecast at 4.1%, although weather-related risks associated with El Niño could generate upward pressure later in the year.
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