Puerto Vallarta, Jalisco – Inflation in Mexico continues its upward trend, with the National Consumer Price Index (INPC) reaching 4.78% annually in the first half of June, an increase from the 4.69% recorded at the end of May, according to the National Institute of Statistics and Geography (Inegi). This marks the highest inflation level since February of this year, driven by significant increases in the prices of goods and services.
The INPC showed a biweekly increase of 0.21% compared to the end of May. Core inflation, a critical measure that predicts the long-term trajectory of general inflation, rose by 0.17% monthly and stood at 4.17% annually. Within this index, goods prices registered an annual inflation of 3.33%, continuing a 19-month decline trend. However, service prices experienced a slight deceleration, reaching 5.19% annually compared to 5.22% in May.
The non-core price index, encompassing government-regulated rates, saw a biweekly increase of 0.34% and an annual rate of 6.73%. Agricultural product prices rose by 0.56% biweekly, and energy and government-authorized tariffs increased by 0.13%. Notably, the price of fruits and vegetables continues to exert upward pressure on overall prices, with a significant annual increase of 17.28%.
“The rebound in the inflation of non-food merchandise is concerning, as it was one of the subcomponents that had shown the most deceleration and low levels. The inflation of food merchandise, although it has continued to slow down, remains high, above 4%,” stated Jesús Anacarsis López, deputy director of economic analysis at Grupo Base.
Among the products with the highest price increases in early June were chayote (79.25%), oranges (19.29%), lettuce and cabbage (15.37%), and zucchini (9.65%). In contrast, tomatoes and serrano peppers showed price decreases of 11.83% and 18.45%, respectively. Despite drastic increases in prices for other products like cilantro, their impact on the INPC has yet to be seen.
These results have surpassed market expectations. Citibanamex’s latest survey of 31 institutions projected a price rebound but estimated the index would reach around 4.71%.
The Bank of Mexico (Banxico) is set to announce its monetary policy decision this Thursday. In March, Banxico reduced the interest rate to 11.00%, and in May, the Governing Board unanimously decided to maintain it at that level. “This week, it will be crucial to observe Banxico’s actions amid a context of uncertainty—whether the rate will be reduced or maintained, and whether the decision will be unanimous or show divergence among the Governing Board members,” noted the organization “México, ¿cómo vamos?”.
As Mexico grapples with escalating inflation, the forthcoming decisions by Banxico will be pivotal in shaping the country’s economic stability and growth.
Sources:
- National Institute of Statistics and Geography (Inegi)
- Jesús Anacarsis López, Deputy Director of Economic Analysis at Grupo Base
- Citibanamex Survey
- “México, ¿cómo vamos?” organization
Puerto Vallarta, Jalisco – Inflation in Mexico continues its upward trend, with the National Consumer Price Index (INPC) reaching 4.78% annually in the first half of June, an increase from the 4.69% recorded at the end of May, according to the National Institute of Statistics and Geography (Inegi). This marks the highest inflation level since February of this year, driven by significant increases in the prices of goods and services.
