Consumer prices rose 5.58% in the first two weeks of August from a year earlier, less than the 5.86% figure at the end of July, the National Institute of Statistics and Geography (INEGI) reported Tuesday. The figure was below the median estimate of analysts surveyed by Bloomberg. Prices fell 0.02% versus the second half of July.

Mexico's central bank, known as Banxico, raised its key rate for the second consecutive time earlier this month, to 4.5%. Economists say the Energy Regulatory Commission's price limits, following President Andres Manuel Lopez Obrador's proposal that they be implemented, are likely to be temporary. At the same time, the price limits have acted as a counterweight to pressures from rising food costs, such as chiles and avocados.

Annual inflation peaked at 6.1% in April, before declining in subsequent months. Still, it has remained above the central bank's 3% target, plus or minus one percentage point.

"It doesn't seem to me to be a proper idea that there are price controls and that there tries somehow to be interventions that distort prices in the market, for example, because it can lead to black markets," Citibanamex chief economist Adrian de la Garza said ahead of Tuesday's report. "It can lead, for example, to the creation of black markets."

Core inflation remained under further pressure, accelerating to 0.28% from 0.13% in the previous fortnight, according to INEGI. Some economists have projected that the central bank will implement a tightening cycle for the rest of the year to keep inflation under control, although the five-member board has been divided on policy at its last two meetings.

Central bank governor Alejandro Diaz de Leon will step down at the end of his term in December, and Lopez Obrador proposed former finance minister Arturo Herrera to replace him. The change of members could alter the board's decisions, which has maintained a 3-2 split in the last two meetings, with members Galia Borja and Gerardo Esquivel opposing the adjustment.

The central bank meets next on September 30 and then in November and December. Ahead of its last two meetings, Banxico cut interest rates 12 times starting in August 2019 by a total of 4.25 percentage points, providing monetary stimulus to a crisis-stricken economy hit by the pandemic.

Fruits and vegetables rose 2.33% since the end of July, with an increase of 26.78% in serrano chiles and 8.98% in avocados. Domestic gas fell 15.06% during the period. The economy posted a strong recovery in 2021, noting a 19.7% expansion in the gross domestic product in the second quarter from a year earlier and a quarterly increase of 1.5%. GDP plummeted 8.2% last year, the largest contraction in nearly a century.