Background on Inflation and its Impact
Inflation in Mexico has once again increased during the first half of September, a month marked by national festivities. This information was released by the National Institute of Statistics and Geography (Inegi).
Understanding Inflation in Mexico
Inflation refers to the general increase in prices of goods and services over time. In Mexico, it directly affects consumers’ purchasing power and overall economic stability.
Who is Inegi?
The National Institute of Statistics and Geography (Inegi) is Mexico’s official statistics agency. It provides vital data on various aspects of the country’s economy, including inflation rates.
Recent Inflation Developments
According to the Inegi report, the Consumer Price Index (CPI) rose by 0.18% compared to the previous quarter, placing annual inflation at 3.74%.
Accelerating Inflation
This marks the third consecutive quarterly increase in inflation, though it remains within the Bank of Mexico’s (Banxico) target range of 3% ±1 percentage point.
Monex’s Analysis
Monex, a leading Mexican financial group, anticipates further economic slack due to weakened activity. This, combined with the recent Fed rate cut and the Mexican peso’s appreciation, suggests Banxico will likely maintain its rate-cutting course.
Inflation Breakdown
Subyacente Inflation
The subyacente inflation, which excludes more volatile items, increased slightly for the second consecutive quarter, reaching 4.26%.
- Goods inflation rose by 4.19% compared to the previous year.
- Services showed a 4.32% price increase.
Alejandro Saldaña, Chief Economist at Ve por Más, noted that goods have maintained an upward trend, partly due to a low base of comparison and the lagging effects of currency depreciation observed between Q3 2024 and early 2025. Additionally, trade disputes might also play a role.
Non-Subyacent Inflation
Non-subyacent inflation, which includes more volatile items like agricultural products and energy, increased for the third consecutive quarter, reaching 2.01% in early September.
- Agricultural products saw a 2.96% increase.
- Energy and government-authorized tariffs rose by 1.23%.
Key Questions and Answers
- What is the current inflation rate in Mexico? The consumer inflation rate has risen to 3.74% in the first half of September.
- What is the subyacente inflation rate? The subyacente inflation rate, which excludes more volatile items, is at 4.26%.
- What is the non-subyacent inflation rate? The non-subyacent inflation rate is 2.01%.
- What factors are contributing to the rise in inflation? Factors include economic slack, currency depreciation effects, and potential trade disputes.
