MEXICO CITY.– “The Mexican inflation rate increased in May to 5.89 %, after prices rose in the fifth month of the year by 0.20 %,” INEGI reported on Wednesday, June 9.
In May 2020, the corresponding data reflected a 0.38% increase in the consumer price index (CPI), bringing the inflation level to 2.84%.
In April, Mexico recorded inflation of 6.08%, the highest since the end of 2017. So this May figure, although still high and far from the Bank of Mexico’s 3% target, reflects a slowdown in the rise of consumer prices.
The underlying price index, considered a better parameter to measure general dearness because it eliminates items with high volatility in their prices, increased 0.53% monthly, and left the annual rate at 4.37%, Inegi said.
Within the subgroup of underlying goods and services, merchandise increased 0.62% and services grew 0.42%, with an annual rate of 5.76% and 2.84%, respectively.
The non-core, agricultural prices increased 1.91 % with respect to the previous month, and energy and government-authorized tariffs fell 2.71 %. On an annual basis, agricultural prices have risen 4.67 %, while energy tariffs have soared 15.97 %.
Basic food basket
The prices of the minimum consumption basket, made up of 176 products and services, marked a monthly increase of 0.03 %, for an annual increase of 7.21 %.
INEGI also announced that in May, the producer price index, including oil, showed an increase of 0.81% compared to the previous month, reaching an annual variation of 6.01%.
Inflation in 2020 closed at 3.15%, while in 2019 the annual rate was 2.83% and in 2018 prices rose 4.83%.
In a report issued separately, Grupo Financiero Banorte highlighted that inflation began to moderate its trend, going from 6.08% in April to 5.89% in the fifth month of the year, a pace that could be maintained in the following months.
“As a result, we expect a drop in annual inflation to approach 5% by the beginning of the fourth quarter of 2021. Despite the above, inflation will remain relatively high, with several supply-side issues still affecting price dynamics, in addition to a possible reallocation of spending toward services rather than goods as vaccination campaigns advance and people go out more,” the bank said.
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