Mexico’s 12-month long inflation slumped in the month of November to its lowest in nearly 2-years due to the lower food costs; however increase in tax for 2010 threatened to cause a spike in inflationary figures.

Moreover, the consumer prices in November zoomed 0.52%, tearing down the annual rate to 3.86% from 4.50% in October.

The average anticipation in a Reuters poll was for a increase of 0.57 percent in the month.

In October 2009, leading consumer prices were increased by 0.30% and core price rose 0.29%.

The economic system of the country has started to recover from a deep recession at the end of the summer, however, higher taxes in 2010 and bloated unemployment rolls are expected to hurt any recovery.

While talking to reporters last week, central bank governor Guillermo Ortiz has warned that tax hike would likely cause a one-time spike in inflation by next year. On the other hand, many analysts expect that higher inflation will prompt the central bank to increase its important lending rate early next year.

According to the statement issued by the bank on inflation in 2010 states, “Consumer prices will likely rise, on average, as much as 5.25 percent in the 12 months through the fourth quarter of 2010.”