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Inflation in Mexico rises again to 7.77%, after a six-week downward streak

2022-12-22T15:29:53.375Z


The escalation of prices in the country has risen again, driven by the rise in air transport and in products such as serrano chili


The downward trend in the escalation of prices in Mexico has been broken in the first 15 days of December.

The annual inflation rate stood at 7.77%, according to the National Consumer Price Index (INPC) released this Thursday by the Inegi, after standing at 7.46% at the end of November.

The products that have contributed to the rebound in inflation are air transport —with a fortnightly increase of 19.16%—, tourist services —with an increase of 12.71% at a fortnightly rate— and the increase of 18.41% in the price of serrano pepper.

The market was anticipating this rebound when the promotions and discounts of commercial initiatives of El Buen Fin were eliminated. The increase in prices in the country reached its highest level last August, when it was located at 8.77%.

The underlying price index, which includes the products with the least volatility, rose 8.35% compared to the same period in 2021. In the interior, the prices of merchandise became more expensive by 11% compared to the same period in 2021, while services reported an increase of 5.22%.

The generics that explained this increase were air transport services (19.61% fortnightly), package tourist services (12.71%) and foreign bus services (2.01%), due in part to a correction for the effect of the Good End, but also to a greater seasonal demand.

As for the non-core index, which includes energy prices, the index increased 6.08% at the annual rate.

The prices of agricultural products rose 8.85%.

The generics with the greatest fortnightly increase were serrano peppers (18.41%), poblano peppers (11.98%), other fresh peppers (8.97%) and lemon (6.22%).

The cost of energy and government tariffs fell 0.54% at a fortnightly rate.

For months, the López Obrador Administration has implemented a gasoline subsidy program, which has already cost more than 300,000 million pesos to the treasury.

A measure that has managed to contain a little the escalation of prices in this area.

The products and services that fell in price compared to the previous fortnight were domestic LP gas with 3.08% at a fortnightly rate;

Onions were priced 9.79% below the previous fortnight, while green tomatoes registered a fortnightly drop of 5.84%.

The data published by the Inegi is released a week after the last monetary policy announcement by the Bank of Mexico, when its governing board decided to raise the interest rate by 50 basis points to place it at 10.5%.

Although the rate is at historical levels, the latest decision by the central bank broke a streak of four consecutive increases of 75 basis points.

With these first data for December, analyst Gabriela Siller from Banco Base estimates that the rise in prices in the last month of the year will be close to 7.8%.

“The publication of inflation for the first half of December confirms that upward risks to inflation persist, especially in the underlying merchandise component, both food and non-food,” she explains.

For 2023, Banco Base's inflation expectation remains unchanged at 5.1%.

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Source: elparis

All news articles on 2022-12-22

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