The first relief has arrived for the finances of Mexicans in 2024. Inflation in the country has slowed in the first half of February and stands at 4.45% at an annual rate, according to the National Consumer Price Index (INPC) that was announced this Tuesday by the National Institute of Statistics and Geography (Inegi).
In the first half of February 2024, the price index, which marks the general increase in prices, fell 0.10% compared to the previous fortnight.
In January, the inflation rate was 4.88% and had shown increases since October 2023.
The February data has surprised financial analysts.
According to the latest Citibanamex expectations survey, the index was estimated to be at 4.73% and was even below the lower range than expected by the 35 institutions surveyed.
The decrease in the price of some foods in the basic basket was decisive for this slowdown.
The tomato, a key product in the diet of Mexicans and which has shown dramatic increases in recent weeks, showed a drop of 35.39% in the last fifteen days, the green tomato showed a drop of 13.10% and the chile poblano registers a drop of 11.18%
In this sense, underlying inflation, which determines the trajectory of general inflation in the medium and long term, was 4.63% at an annual rate, a figure lower than the 4.76% registered at the end of January.
Within this index, the prices of merchandise increased 4.09%, while the price of services showed an increase of 5.28% compared to the same period in 2023.
Meanwhile, the non-core index, which includes products with the most volatile prices and rates administered by the Government, stood at 3.93% at an annual rate, a decline of 1.10% in the first half of February.
Gabriela Siller, director of economic analysis at Grupo Base, indicates that the slowdown in Mexico's general inflation was mainly supported by the non-core component.
“It is worth remembering that, in the last monetary policy announcement of the Bank of Mexico, the statement of maintaining the rate at its current level for a certain time was eliminated and it was indicated that in the following meetings the possibility of adjusting the reference rate will be evaluated. ”, mentions the specialist.
Although the data has caused a positive impression, it is not expected that there will be an immediate change in the monetary policy decision of the Bank of Mexico.
Ricardo Aguilar Abe, chief economist at Invex, indicates that the central bank will begin a rate cut cycle in May and not in March, as most market analysts expect.
“It would be important for the monetary policy statement to confirm the convergence of inflation towards the objective and eliminate references to the uncertainty of the inflationary outlook before starting a relaxation cycle,” mentions Aguilar.
Mexico's economy grows 3.2% in 2023
At the same time, Inegi announced that Mexico's Gross Domestic Product (GDP) grew 3.2% during 2023, in real terms and with figures adjusted for seasonality.
This is a slight adjustment compared to the previous figure of 3.1% released at the end of January by the institution.
GDP growth in the fourth quarter was 0.08%, being the lowest growth rate since the third quarter of 2021. Due to the revision of the historical series, annual growth was adjusted upward from 2.41% to 2. .51%.
“With the above, in 2023 the GDP accumulated growth of 3.23%.
Thus, the GDP per capita is 1.51% below the 2018 GDP,” says Siller.
Within this data, primary activities (agriculture and livestock) contracted 1.04% at a quarterly level in the fourth quarter, but accumulated a growth of 2.11% throughout 2023, while secondary activities (industry and manufacturing) contracted 0.13% in the fourth quarter, accumulating annual growth of 3.52%.
Finally, tertiary activities (services and commerce) advanced 0.26% in the fourth quarter, accumulating growth of 3.05% throughout the year.
Subscribe here
to the EL PAÍS México newsletter and receive all the key information on current events in this country