The increase in prices does not stop in Mexico. The annual inflation rate was 4.78% in the first half of May, according to the National Consumer Price Index (INPC), published this Thursday by Inegi. This is the third consecutive increase and its highest level since February of this year, when it stood at 4.4%. Although in the first fifteen days of May, the INPC registered a decrease of 0.21% compared to the previous fortnight, explained by the drop in electricity rates due to the hot season, but when compared to the annual rate the data show a acceleration in prices.
The data, although presumed discouraging, is in line with market prospects. According to the Expectations Survey carried out by Citibanamex among 34 financial institutions, it was estimated that inflation would reach 4.8% at an annual rate.
Core inflation, which determines the trajectory of general inflation in the medium and long term, showed an increase of 0.15% at a biweekly rate and 4.31% at an annual rate. Within this index, the price of merchandise increased 3.55% at an annual rate, while services stood at 5.23%. “This behavior suggests certain stability in the price level within this component,” he indicates. Gabriela Siller, director of economic analysis at Grupo Base. For its part, the non-core price index, which includes government and regulated rates, registered a drop of 1.31% fortnightly and increased 6.27% at an annual rate. Within the non-core component, the prices of agricultural products increased 0.43%, and those of energy and tariffs authorized by the government decreased 2.86%.
Once again, the most popular foods in the Mexican diet continue to see the most significant increases. In May, the products that increased the most were the poblano chili, with an increase of 15.32%, the tomato, the base of sauces, salads and traditional food preparations, showed an increase of 10.44% and the serrano chili an increase of 13.99%. In contrast, electricity shows a decrease of 21.45% and cucumber shows a decrease of 13.57%.
The behavior of inflation in recent fortnights has generated uncertainty. “Among the main upward risks for Mexico’s inflation are blackouts, public insecurity, increased labor costs, high government deficits, droughts and the effects of climate change, as well as high inflation in the United States. ”mentions Siller. The deputy governor of the Bank of Mexico, Galia Borja, mentioned this week that service prices do not show a downward trend and that the persistence of service inflation may be due to the transfer of costs, including salaries and wages in the face of increases to the minimum salary.
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