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Inflation in Mexico jumped dramatically in November to 7.37 percent, its highest level since January 2001, and financial analysts have raised their annual forecasts to close the year at 8 percent.

In the second half of the November, the National Consumer Price Index (INPC) jumped to 7.7 percent, also its highest level since 2001, according to the National Institute of Statistics and Geography (Inegi).

“The bad news about inflation looks even worse if we look at this problem through the INPC’s fortnightly series, since the annual rate for the second half of November reached 7.7 percent,” said Central Bank of Mexico (Banxico) Deputy Governor Jonathan Heath.

Particularly worrisome is the fact that Mexico’s underlying inflation has been rising for 12 consecutive months, indicating a trajectory of continued increased inflation in the long term.

Pamela Díaz, an economist for Mexico at BNP Paribas, said that if inflationary pressures continue in the non-core segment, which represents the greatest volatility, consumer prices could reach levels of up to 8 percent in 2021.

“If we maintain this growing trend during December, inflation would be close to 8 percent,” she said.

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