The increase in prices runs amok in Mexico.
The annual rate of generalized inflation stood at 8.62% in the first half of August, according to the National Consumer Price Index published this Wednesday by the National Institute of Statistics and Geography (Inegi).
With an increase of 0.42% compared to last month, inflation has reached its highest level since August 2000.
The purchase of food is the one that puts the most pressure on the pockets of consumers.
Legumes and fresh vegetables are the ones that have presented the most increases, such as onion, which has risen in price 37.6% compared to the last fortnight of July, potatoes rose 2.36% and corn tortillas became more expensive 1 .56% in the same period.
Additionally, core inflation, which does not take into account fresh food or energy due to its volatility and which determines the trajectory of general inflation in the medium and long term, had a boost of 0.49% in the last fortnight, while that in its annual rate the increase was 7.97%, a level not seen for these products since November 2000.
The increase has exceeded all market expectations.
According to the latest Citibanamex expectations survey, inflation was expected not to exceed 8.52%, while this level has risen 16 months in a row the Bank of Mexico's inflation forecast.
At the beginning of the month, the central bank increased its reference interest rate, which determines the value of money, to 8.50%, its highest level since it began implementing its monetary policy in 2008.
Gabriela Siller, director of economic analysis at Banco Base, points out in her report this Wednesday that the upward pressures on the underlying inflation of food merchandise and on the prices of fruits and vegetables in the non-core component, put pressure on generalized inflation continue to grow in the coming months.
"Additionally, there are upward risks for energy prices," the analyst details and warns that the Bank of Mexico may continue to raise its interest rate, towards a level between 9.5 and 10% at the end of the year.
Mexico is no stranger to the geopolitical problems that have caused price increases around the world, but it becomes particularly notable in the face of the Mexican government's attempts to curb the escalation.
The Economic Commission for Latin America and the Caribbean (ECLAC) has warned in its most recent report for Latin America the risk that rising prices represent.
"To the lower economic growth are added the strong inflationary pressures, the low dynamism of job creation, falls in investment and growing social demands," the agency mentions.
Food merchandise reached an annual inflation of 12.73% in the first fortnight of August, a new maximum since the second fortnight of December 1999.
– Gabriela Siller Pagaza (@GabySillerP) August 24, 2022
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