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INEGI reports inflation for 2017 highest in 17 years

According to the National Institute of Statistics and Geography, the National Consumer Price Index reached a level of 6.77 percent last year, higher than estimated by analysts consulted by Bloomberg.

The National Index of Consumer Prices (INPC) in 2017 was 6.77 percent , according to information from the National Institute of Statistics and Geography (Inegi).

This figure is the highest since 2000, which was 8.96 percent. This was during the last year of the presidency of former President Ernesto Zedillo. This figure is higher than that estimated by analysts consulted by Bloomberg , who predicted that annual inflation would be at 6.75 percent.

During 2017, Banco de México’s target on annual inflation was (3 +/- 1 percentage point). However, in the last meeting of the Governing Board of Banxico, the majority of its members estimated that the general indicator of last year exceeded 6.63 percent.

“Considering the impact of the aforementioned shocks, as well as the effect of the increase in the minimum wage that went into effect in December, instead of January, the majority anticipates a closure for the 2017 annual headline inflation higher than the November figure ( 6.63 percent,” explained the Governing Board in the minutes released in December.

Regarding monthly inflation in December, the agency published that it was 0.59 percent.

Core inflation, an indicator that does not include high volatility prices such as energy and transport, was 0.42 percent, in which the increase of 0.32 percent in merchandise and 0.50 percent in services stood out.

Within the non-core index, which includes products with high variation in their prices as agricultural and energy, agricultural products accelerated by 1.81 percent and energy and tariffs not authorized by the Government rose 0.65 percent at monthly rate.

Analysts expect a downward trend in inflation to begin to emerge from the first half of January. The Banxico expectations survey estimated that annual inflation in the first month of 2018 would be around 5.3 percent.