Inflation in Mexico continues its slowdown, although it is stable. In April 2023, inflation decreased 0.02% compared to March and the annual rate stood at 6.25% at the end of the month, as reported on Tuesday by the National Institute of Statistics and Geography (Inegi). The National Consumer Price Index (INPC) thus registers three consecutive months of slowdown and is at its lowest level since October 2021.
Core inflation, which does not take into account fresh food or energy due to its volatility and which determines the trajectory of general inflation, showed an increase of 0.39% monthly and 7.67% at an annual rate. In this section, the prices of goods increased 0.50% at a monthly rate and 9.54% in its annual comparison, while the cost of services had an increase of 0.25% in the last month and 5.46% compared to the previous year.
Within the non-core index, one of the indicators that showed a more marked decrease was electricity rates, due to the adjustment made by the hot season in the country.
In that sense, Gabriela Siller, director of economic analysis at Grupo Base, indicates that traditionally in April, monthly inflation tends to be low or negative. "Since 2010 (omitting 2021 and 2022 that inflationary pressures were observed), monthly inflation averaged -0.23% in April, mainly due to the effect of decrease in electricity rates in the first half of the month," says the analyst.
Among the products that had the most price drops, and in descending order, according to the Inegi, were the serrano chili, with a decrease of 18.07%; electricity, with a decrease of 12.49%, air transport with a fall of 15.84% and tomatoes with a monthly reduction of 9.93%. In contrast, the products that rose the most in price were orange, with an increase of 14.6%, avocado with an increase of 5.62% and chicken, with an increase of 4.72% compared to March 2022.
The Bank of Mexico (Banxico) has considered putting a brake on the increase in the benchmark interest rate due to the slowdown in inflation. In March, the central bank placed the interest rate at 11.25%, while its next monetary policy decision will be on May 18. Additionally, the Inegi has proposed modifying the products it evaluates to measure inflation, so it will initiate a public consultation where Mexicans can make contributions on the way they consume, as well as consult the methodology for the change in the base of the basket and the products that will be included or removed from the National Consumer Price Index.
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