Mexico’s inflation records six-month decline and stands at 4.79% in July

Mexico’s inflation has been decelerating for the past six months, registering a rate of 4.79% in July, the lowest since March 2021, as per the National Institute of Statistics and Geography (Inegi).

Compared to July of the previous year, there was a monthly inflation of 0.74% and an annual inflation of 8.15%.

The core price index, which removes seasonally volatile items, saw a monthly rise of 0.39% and an annual rate of 6.64%.

Delving into the core index, goods prices increased by 0.31% monthly, and services by 0.49%.

Conversely, the non-core price index, which encompasses the entire basket of goods, varied by 0.77% for the month and showed a year-on-year decline of 0.67%.

In specific categories, agricultural product prices grew by 1.90% within the month, while energy prices and government-regulated rates fell by 0.23%.

This July data aligns with the mid-month figure, indicating a 4.79% inflation rate.

Mexico’s President, Andrés Manuel López Obrador, highlighted the positive implications of this declining inflation for household economies.

Additionally, in May, the Bank of Mexico (Banxico) chose to keep the interest rate steady at 11.25%, marking the first time since June 2021 and concluding a period of rate hikes initiated when inflation was at 4%.

The Financial Group Banco Base foresees an end-of-year inflation expectation of 4.6%.

Given these conditions, experts anticipate the Central Bank to maintain the current interest rate in its upcoming monetary policy announcement on August 10.

It’s noteworthy that continuous rate hikes over almost two years ended as inflation began showing signs of a pullback, mainly influenced by fuel and food prices.