Inflation in Mexico advances to 8.76% year-on-year in the first half of September

Inflation in Mexico reached 8.76% year-on-year in the first half of September, the National Institute of Statistics and Geography (Inegi) reported on Thursday.

“In the first fortnight of September 2022, the National Consumer Price Index [INPC] increased 0.41% compared to the previous fortnight. With this result, annual general inflation stood at 8.76%,” stated the agency in a fortnightly report.

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That level of the price index that measures inflation was placed one hundredth below the 8.77% registered in the second half of August, when it reached its highest level since the end of 2000, and is the second highest rate for said fortnightly period since 2016.

In the same fortnight of 2021, biweekly inflation was 0.42% and annual inflation was 5.87%.

The so-called “core price index”, which rules out products with volatile prices throughout the year, “grew 0.44% at a fortnightly and annual rate, 8.27%.”

Within this underlying index, “at a fortnightly rate, the prices of merchandise increased 0.50% and those of services, 0.36%.”

In the same period, the “non-core price index”, which considers all the products in the basket, “rose 0.32% biweekly and 10.22% annually.”

Within the non-core index, “at a fortnightly rate, the prices of agricultural products grew 0.86% and those of energy and tariffs authorized by the government fell 0.14%.”

The government has an anti-inflation plan underway focused on lowering fuel prices and stimulating the production of agricultural products, with a free supply of fertilizers to farmers who produce subsistence grains.

On August 11, the Bank of Mexico (Banxico, central) agreed to increase the interbank interest rate by 0.75 percentage points to a historical maximum of 8.50%, to contain the inflationary pressures accumulated by the pandemic and the current geopolitical conflict.

The monetary decision considered “the tightening of global financial conditions, the environment of heightened uncertainty, the accumulated inflationary pressures of the pandemic and the geopolitical conflict, and the possibility of greater effects on inflation.”

The next monetary decision is scheduled for next Thursday, September 29, in which the Mexican central bank could continue the upward trend in the rates applied in the U.S. by the Federal Reserve (Fed, central bank).

The Fed announced on Wednesday a three-quarter percentage point increase in U.S. interest rates, its fifth increase since the outbreak of the COVID-19 pandemic two years ago.