Press "Enter" to skip to content

INEGI reports a 6.05 percent increase in consumer price index over last year

Mexico City, Mexico — The consumer price index registered an increase of 0.06% in the first half of April compared to the second of March, but compared to a year earlier, the increase was 6.05%, reported the National Institute of Statistics and Geography (INEGI), well above Banco de México’s target range of 3% (plus-minus 1%).

In the annual comparison, all product categories presented increases compared to the first half of April 2020, with the sole exception of fruits and vegetables, which showed a decrease of 0.64 percent.

It is the first time in 10 years that there has not been a drop in inflation in the first half of April, which added to the fact that in April 2020, there was a major collapse of energy, annual inflation shot up from 5.22% to 6.05%, indicated the Monex Financial Group.

“The advance in prices presents its fastest pace in just over three years, and configures a scenario that is increasingly distant from what Banxico anticipated, so that the probabilities of a new rate cut seem to be fading,” added Monex economists.

“In the last 2 fortnights, annual inflation has gained 211 basis points, an increase that had not been seen since at least 1990. Although much of the explanation derives from the base effect of comparison, in recent weeks there have been surprises that divert the National Consumer Price Index from the path estimated by Banxico and the markets, so we expect strong adjustments,” they added.

The overflow of inflation in the first half of April was the result of the notable increase in non-core prices, which includes the volatile prices of raw foods and fuels, of 0.28% in biweekly terms and 12.21% in annual terms.

Within these non-core prices, those of energy products showed an increase of 28.22% in annual terms, although in the fortnightly comparison they fell 2.31% as a result of the adjustments in electricity rates within the warm season scheme in 18 cities of the country.

Monex recalled on this point that the Federal Electricity Commission (CFE) announced last week that during April, there would be an increase in the costs of all electricity rates to compensate for the effect of the energy contingency that occurred in mid-February.

Products that contributed most to the rise in underlying prices were food, beverages and tobacco, with an annualized rise of 5.96%, and non-food merchandise with an increase of 5.32% compared to the price level of the first week of April 2020.

Loading...