http://www.bloomberg.com/apps/news?pid=20601068&sid=a_X.xnQVgYmw&refer=economy
Mexico Inflation Accelerates the Most in Over 3 Years (Update1)
By Jens Erik Gould
May 22 (Bloomberg) — Mexico posted the fastest annual inflation rate since December 2004 in the first half of May as costs increased for foods including rice and cooking oils.
Consumer prices climbed 4.83 percent from a year earlier, the central bank said. Prices fell 0.26 percent from the previous month, less than the 0.30 percent decline economists had forecast in a Bloomberg survey.
Mexico faces accelerating inflation as prices for corn, crude oil and other commodities climb worldwide. Central Bank Governor Guillermo Ortiz said May 20 that he is concerned about inflation spreading from items directly tied to commodity costs to other products whose prices haven’t increased so far.
“This isn’t a good number,” said Juan Trevino, chief economist for HSBC Holdings Plc in Mexico City. “This could be the start of contamination. It opens the door for suspicions.”
Core consumer prices, which exclude volatile food and energy costs, rose 0.26 percent from a month earlier.
Mexican local-currency bonds fell, pushing benchmark yields to the highest in more than four months, after the inflation report was released.
Yields on benchmark 10 percent government bonds due December 2024 rose 5 basis points, or 0.05 percentage point, to 8.22 percent at 10:07 a.m. in New York. Yields rose to the highest since Jan. 9. The bonds’ price fell 0.55 centavo to 116.03 centavos per peso, according to Banco Santander SA.
To contact the reporter on this story: Jens Erik Gould in Mexico City at jgould9@bloomberg.net.
Last Updated: May 22, 2008 11:04 EDT
Tags: economic destablization, gas crunch, gas prices, inflation, mexico, oil, peak oil
