Mexico City. Inflation in Mexico eased in the first half of August, supported by fresh food. The national consumer price index (INPC), which is launching a basket and weighting structure, registered a reduction of 0.03 percent compared to the previous fortnight. Thus, annual inflation stood at 5.16 percent, according to the report released this morning by the National Institute of Statistics and Geography (Inegi).
Starting in the first half of August 2024, the INPC will be measured with an updated basket and weighting structure, in accordance with the new spending patterns of Mexican households, identified by the National Seasonal Household Income and Expenditure Survey, conducted throughout 2022 (ENIGH EST 2022). The result is linked to the current index using the chained Laspeyres methodology to provide continuity to the series. “In this way, users can continue to interpret the variations as they do currently,” stated the Institute.
Falling prices for agricultural products and air transport were the main contributors to inflation in Mexico slowing down, from 5.52 percent in the last half of July to 5.16 percent annually in the first half of August. Despite the slowdown, inflation in Mexico has been above 5 percent for four fortnights, still far from the price stability target of the Bank of Mexico (BdeM) of 3 to 4 percent.
The cost of agricultural products reported a biweekly drop of 1.30 percent and an annual growth of 10.95 percent, still very high. Meanwhile, fruits and vegetables decreased 3.06 percent in the first half of August compared to the previous one, leading to an annual increase of 15.89 percent.
The prices of low-octane gasoline and electricity were the generic products that had the greatest impact on the inflation rate, with increases of 0.46 and 1.90 percent fortnightly, respectively.
Meanwhile, the rise in university (1.51 percent) and high school (2.02 percent) prices were other factors that contributed to the rise in consumer prices. Lunchrooms, restaurants, sandwich shops and taco stands are reluctant to sell the products that most affect inflation.
Greater moderation
According to the survey of expectations, prepared by Citibanamex among 36 financial institutions, inflation was expected to remain at 5.33 percent annually for the first half of August, compared to the 5.52 percent annually recorded in the two previous weeks. Thus, respondents estimated that in the first half of August, the INPC increased 0.13 percent biweekly. In other words, the official data was surprising because it was lower than projected.
Core inflation, which determines the trajectory of general inflation in the medium and long term, increased by 0.10 percent on a monthly basis to reach 3.98 percent on an annual basis.
Within this index, merchandise showed a biweekly increase of 0.14 percent and an annual rate of 3.07 percent, while the cost of services increased 0.07 percent in the first half of August and stood at 5.11 percent at an annual rate.
Meanwhile, the non-core price index, which includes volatile prices, showed a decrease of 0.46 percent in the first 15 days of August and an increase of 8.80 percent at an annual rate.
The rapid change in the use of technology, the coexistence of people with their pets, as well as the new consumption patterns after the Covid-19 pandemic, were sufficient reasons for Inegi to update the list of expenses used to measure inflation in Mexico.
#Inflation #drops #annually #August
– 2024-08-28 17:37:33
