Mexico: Inflation accelerates for the third consecutive time to 5.61% in the first half of July.

Ignacio Teson•Wednesday, July 24, 2024•1 min read

Inflation in Mexico accelerated for the third consecutive time during the first half of July, reaching its highest level since the second half of May 2023.

According to the information released by the National Institute of Statistics and Geography (Inegi), the National Consumer Price Index (INPC) showed a biweekly variation of 0.71% during the first half of July, bringing annual inflation to 5.61%.

This marks the third consecutive biweekly acceleration and the highest level since the second half of May last year, when it stood at 5.67%.

Thus, inflation remains outside the Bank of Mexico’s (Banxico) target range of 3% +/-1 percentage point. In its latest monetary policy meeting, where Banxico’s Board of Governors kept the interest rate at 11%, some members noted the complex outlook for inflation.

Some analysts predict that the central bank will cut its rate again, unanimously, in August.

The report indicated that despite broad pressures within the index, fruits and vegetables continue to strain Mexicans’ wallets, driving inflation higher.

In the first half of the month, the non-core index showed an annual variation of 10.64%.

Within this, agricultural products exerted the most pressure, with a 25.69% annual increase in the prices of fruits and vegetables.

Regarding core inflation, which excludes the most volatile goods and services, it stood at 4.02% annually in the first half of the month. In this category, services exerted the most pressure, with prices rising 5.17% annually.

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.