Mexico seems to have put a brake on inflation, according to the latest data released by the National Institute of Statistics and Geography (Inegi). The National Consumer Price Index (INPC) stood at 4.26% at an annual rate and 0.38% at a monthly rate, adding up to nine months of constant deceleration. If you look at the picture of inflation in the medium term, the data is even more contrasting: in October 2022, inflation was at a rate of 8.41% and such a low level had not been observed since February 2021.
The drop in prices has also surprised financial analysts. According to Citibanamex's most recent Expectations Survey, experts expected a level of 4.28% in October, confirming that the end of the year may have positive data in terms of price increases.
Although this is positive news for analysts, this level is still outside the Bank of Mexico's (Banxico) targets, whose expectations are in the range of 3% or one point higher. Meanwhile, the central bank will make its monetary policy announcement on Thursday, where no change is expected from the 11.25% rate that has remained unchanged since March of this year.
In a more detailed look at Thursday's data, core inflation, which determines the trajectory of headline inflation in the medium and long term, stood at 5.50% at an annual rate in October, another index that continues to decline, from the 5.76% recorded in September and at its lowest level since October 2021.
On the other hand, non-core inflation, which includes products with more volatile prices and government-administered tariffs, stood at 0.56% in October. It was the prices of agricultural products that observed a monthly decrease of 2.09%, bringing the annual rate to 1.62%.
Fruits and vegetables have registered the most significant price decreases, at least in the last half of October. According to Inegi, the products that fell the most in price were tomatoes, with a drop of 14.46%, and onions and oranges, with a decrease of around 11% each.
In contrast, energy was the one that registered the most visible increases. Electricity registered an increase of 19.23% in October, after the end of the electricity rate program for the warm season in 18 cities in the country. Meanwhile, domestic LP gas increased 3.42% and air transport 13.37%.
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