Inflation in Mexico, on the Decline

The drop in fruit and vegetable prices allowed the annual general inflation rate to continue declining in the first 15 days of September, reaching 4.66%, marking four consecutive fortnights of reduction, according to figures from the National Institute of Statistics and Geography (Inegi).

In fact, this level came in below the 4.71% expected by specialists in the Citibanamex Expectations Survey.

The decrease was due to a slowdown in the growth of agricultural prices compared to the previous fortnight, dropping from 7.97% to 6.50%, accumulating four consecutive periods of decline and recording the lowest annual inflation since the second half of March this year.

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Notably, the prices of fruits and vegetables, which reported an inflation rate of 7.15%, also slowed for the fourth consecutive fortnight, reaching their lowest level since the last 15 days of November 2023.

This was reflected in the behavior of tomato prices, which decreased by 9.49%; followed by oranges, with 13.63%; bananas, with 5.20%; avocados, with 5.98%; zucchini, with 7.97%; and sugar, with 2.28%.

There were also declines in professional services of 14.79%; electricity, down 0.77%; and low-octane gasoline, down 0.15%.

Thus, according to a report from Valmex, as a result of the moderation in inflation, it is expected that the Bank of Mexico will cut the benchmark interest rate by 25 basis points on September 26.

They also noted that a less adverse inflation outlook could allow the Bank of Mexico’s Board of Governors to discuss more significant adjustments in subsequent meetings.

Nota publicada originalmente en El Heraldo de México