Overview of Inflation Trends in Mexico
In the first half of May, Mexico’s consumer inflation reversed its previous direction and surged once again, placing it outside the Banco de México (Banxico) target, according to the National Institute of Statistics and Geography (Inegi).
Key Inflation Figures
- Quincenal advance: 0.09%
- Annual inflation rate for consumers: 4.22%
This increase brought the inflation rate up from 3.90% in the previous quincena, marking its highest level since the first half of December 2024 (4.44%). The inflation rate remains outside Banxico’s objective of 3% ±1 percentage point.
Market Expectations vs. Actual Inflation
The market had anticipated inflation to exceed Banxico’s target, but the actual figure surpassed expectations. According to a Reuters survey, analysts projected an inflation rate of 4.01%.
Price Changes in Key Categories
Agricultural Products
The Inegi report highlighted that the only category showing a price decrease compared to the previous year was agricultural products, specifically fruits and vegetables.
- Fruits and vegetables: 1.22% lower compared to the previous year
- Poultry products: 10.25% more expensive
Overall, agricultural products experienced an inflation rate of 5.79%.
Energy and Government-Authorized Tariffs
In the first half of May, energy and government-authorized tariffs contributed to an inflation rate of 3.71%.
- Energy: 3.18% more expensive
- Tariffs: 4.44% higher
This led to a non-core inflation rate of 4.78% annually in the first half of May.
Core Inflation
The core inflation rate, which excludes more volatile goods and services, stood at 3.97% annually.
- Goods: 3.51% increase
- Services: 4.49% rise
Key Questions and Answers
- What is the current inflation rate in Mexico? The annual consumer inflation rate has risen to 4.22% in the first half of May.
- How does this compare to Banxico’s target? The inflation rate remains above Banxico’s 3% ±1 percentage point objective.
- Which categories experienced price increases or decreases?
- Agricultural products (fruits and vegetables) saw a decrease of 1.22% compared to the previous year, while poultry products became 10.25% more expensive.
- Energy prices rose by 3.18%, and government-authorized tariffs increased by 4.44%.
- Core inflation, excluding more volatile goods and services, was 3.97% annually.
- Why did inflation surpass market expectations? Although the market anticipated inflation to exceed Banxico’s target, the actual figure surpassed analysts’ projection of 4.01%.
