Inflation accelerates and reaches 5.61% in the first half of July

MEXICO CITY (apro).-In the first half of July, the National Consumer Price Index (INPC) registered a variation of 0.71% compared to the previous half, so with this result, the annual general inflation stood at 5.61%.

“In the same fortnight of 2023, the biweekly inflation was 0.29% and the annual rate was 4.79%. The underlying price index increased 0.18% at the biweekly rate and 4.02% at the annual rate,” indicated the National Institute of Statistics and Geography (Inegi).

Government data indicate that this is the largest increase recorded in the first half of July in the last ten years. If the data for each month during the years of President López Obrador’s government are taken into account, this is the largest increase in the indicator during his entire six-year term. It is enough to remember that the smallest increase was recorded in July 2015, when it stood at 0.09% during the administration of Enrique Peña Nieto.

This means that from the 2015 indicator to the one released on Wednesday, there was a difference of 0.62%.

On the other hand, in the first half of July 2024, the variation of the underlying and non-core indices was 0.18 and 2.32%, respectively. In the same half of 2023, it was 0.24 and 0.44%.

Data presented by Inegi reveal that the non-core price index during this period is the highest of the entire six-year period, standing at 2.32%. If the 2015 figure of 0.08 is taken into account, there was an increase of 2.24% in the last decade.

During the first half of July this year, the products that saw the biggest price increases were tomatoes with an increase of 27.97%; chayote with 13.41%; onion with 16.72% and avocado with 10.00%.

During the same period, the products that registered falling prices were grapes with -10.99%; serrano chili with -8.98%; green tomatoes with -5.29% and melon with -5.33%.

The data presented by Inegi this Wednesday correlate with the report presented two weeks ago, when it revealed that June was the fourth consecutive month with rising inflation, which placed the annual inflation rate at 4.98% and reached its highest level since June 2023, moving even further away from the target range of 3%.

Growth projection

Last week, the International Monetary Fund (IMF) lowered its economic growth outlook for Mexico in 2024 from 2.4% – estimated in April – to 2.2% due to a moderation in demand.

According to the latest update of the World Economic Outlook in Mexico, inflation has stabilised since mid-2023, but as in other countries, there are signs of a more rigid service inflation and some of the wage increases that have been recorded are playing a more important role.

Nevertheless, the IMF considered the monetary policy stance to be appropriate and expects inflation to return to the Bank of Mexico’s target of 3%, plus/minus 1%.