We expect inflation in the second half of November to come in at 0.23% bw, driven by the rebound in merchandise prices following Buen Fin discounts and by pressures in agricultural products. On an annual basis, November inflation would stand at 3.79%.
Typically, inflation for this fortnight is around 0.05% bw. Our higher estimate reflects stronger pressures in both the core component (0.08% bw vs. 0.03% bw historically) and the non-core component (0.72% bw vs. 0.13% bw historically).
Within the core component, we anticipate that non-food goods will remain broadly unchanged (vs. –0.20% bw historically), while food goods would post a 0.14% bw increase after the declines observed in the previous fortnight due to Buen Fin discounting.
In previous years, Buen Fin took place predominantly during the second fortnight of November, so the price rebound typically appeared in the first fortnight of December. Since this year the discounts occurred mostly in the first fortnight, we expect the rebound to materialize in the second fortnight of November.
In the non-core component, we expect an increase of 0.72% bw (vs. 0.13% bw historically), driven by a 4.55% bw rise in fruits and vegetables (vs. 0.33% bw historically), which would mark three consecutive fortnights of increases following the favorable rainy season observed in the first half of the year.
With this information, headline annual inflation in November would rise from 3.57% to 3.79%; core inflation from 4.28% to 4.38%; and non-core inflation from 1.18% to 1.84%.  
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