Inflation in Mexico slows its escalation during the first half of May and stands at 7.58%

The rise in prices gives Mexico a break.

During the first fortnight of May, the National Consumer Price Index (INPC) reached 7.58% at an annual rate, its lowest level in four fortnights, since the first of last March, when it stood at 7.29%. , according to the figures released this Tuesday by the Inegi.

The fall in the price of electricity has been key to this decline.

During the first fortnight of May, electricity registered a drop of 20%, compared to the previous fortnight, when summer rates came into effect.

Other products that dropped in price during the first 15 days of May were lemons, onions and serrano peppers.

On the contrary, the components of the IPC that continue to rise are chayote, avocado, tomato and air transport.

Core inflation, the one that the Bank of Mexico takes into account when making its monetary policy decisions, stood at 7.24% compared to the same period of the previous year, the highest level for this same period since 2001, and advanced one 0.34% compared to the previous fortnight.

Within it, the prices of services stood at 4.76% at the annual rate, while the rise in the prices of merchandise was 9.45%.

As for the non-core, which includes more volatile products such as fuels, prices stood at 8.6% at the annual rate, their lowest variation since the second half of August.

Inside, high and low octane gasoline continued to advance at a fortnightly rate of 0.29 and 0.23%, respectively.

For their part, electricity tariffs fell at a fortnightly rate of 20.36%.

By products, the ones that became more expensive this first half of May were chayote, with a fortnightly increase of 24.97%, avocado with 13.38%, tomato 7.92% and air transport with 9.76 %.

On the contrary, the products that presented a decrease in their prices were electricity rates that fell by 20%, lemons with a drop of 24%, onions with 11% and serrano peppers with 16%.

The specialist Rodolfo de la Torre explains that the Government has had to do with this reduction in price escalation because it has reduced electricity rates in summer, however, the expert points out that the plan against inflation has not had to do with this result down.

“In reality, the inflation that corresponds to food is still above 11.23% at an annual rate, that does not mean that the strategy is failing, it is that the plan has a very limited scope and for the long term.

The plan will take effect in a few months, what we see now are fluctuations that we normally see in food and they continue to go up a lot ”, he affirms.

Mexico closed April with the highest inflation rate in 21 years, 7.68, due to the sustained increase in food and fuel prices.

The recovery in demand after the worst of the pandemic and the impact it still has on supply chains are behind the global phenomenon.

Faced with this escalation in prices, the Government of López Obrador has launched a plan, agreed by businessmen, against inflation.

The strategy contemplated six months, in which the costs of the 24 foods that make up the basic basket will not increase, a greater production of grains and the exemption from the collection of tariffs on fertilizers and on the importation of more than 100 foods.

Faced with inflation, the Bank of Mexico has voted for the eighth consecutive time for the increase in the interest rate.

Now it stands at 7%.

The Governing Board voted for the increase of 50 basis points, however, the deputy governor, Irene Espinosa Cantellano, proposed a more aggressive increase of 75% basis points.

The central bank considered the inflationary shocks derived from the pandemic, the pressures from the geopolitical conflict in Ukraine and the strict confinement measures recently imposed in China in the face of new outbreaks of covid-19.

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