Inflation hits 13-month high in October

Latest reading: Consumer prices rose 5.5% on a year-on-year basis in October, following a 5.2% increase in the previous month and slightly exceeding market estimates. October’s reading was the highest in 13 months and marked the fourth consecutive acceleration. Relative to the prior month's data, there were higher price pressures for housing and utilities (+5.3% on a year-on-year basis vs +4.8% in September), food and non-alcoholic beverages (+6.6% vs +6.2% in September) and restaurants and hotels (+7.6% vs +7.5% in September). Meanwhile, core consumer prices were up 5.5% in annual terms in October, following a 5.3% increase in the prior month. Finally, consumer prices increased 0.18% in October on a month-on-month basis, following a 0.32% increase in the prior month.

Panelist insight: Commenting on the reading and on the outlook, Santiago Tellez, analyst at Goldman Sachs, stated: “Disinflation progress stalled in the second half of the year, owing to adverse base effects, higher-than-expected food away from home inflation, and rising prices of domestic commodities linked to high international benchmarks. That said, perishable fruits supply appears to have finally normalized and base effects will be less adverse. We expect further moderation in the high-CPI weight rent component and negative FX passthrough to core goods inflation. We are not presently tracking any meaningful increase in domestic gas tariffs in the remainder of the year. Over the short- and medium-term, the main upside risk to inflation will be the 2026 minimum wage.”

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