In early March 2024, Mexico experienced a rise in inflation, reversing the recent trend of slowing price increases.
The National Consumer Price Index (INPC) grew by 0.27% over the last two weeks.
According to the National Institute of Statistics and Geography (Inegi), the annual inflation rate reached 4.48% as a result.
The news arrived just after the Bank of Mexico (Banxico) reduced its interest rate by 25 basis points to 11%.
In late February, annual inflation was 4.35%. Yet, the latest rate aligns with Banxico’s expectation of an average of 4.6% inflation for the first quarter.
The early March inflation was marginally above the 4.44% yearly rate analysts predicted in the Citibanamex Expectations Survey.
Inegi noted that, in the same period last year, bi-weekly inflation was 0.15%, and the yearly rate was 7.12%.
Banxico’s rate cut, the first in three years following a year of stability, responded to the observed disinflation.
The core inflation, excluding volatile items, went up by 0.33% in the fortnight, reaching an annual 4.69%.
This slight increase marks the first yearly rise in core inflation after a year of consistent decline, slightly exceeding analysts’ 4.60% prediction.
Within this core category, goods prices rose by 0.10% over two weeks and service costs by 0.61%. Annually, goods inflation was 3.96%, and services stood at 5.57%.
The non-core inflation, covering volatile items, increased by 0.09% fortnightly, hitting 3.84% yearly.
In this category, agricultural prices rose by 0.34% over the fortnight, achieving an 11.74% annual inflation.
Notable Price Movements
Items seeing price increases included chicken, airfare, travel packages, lettuce, cabbage, housing, small food establishments, tomatoes, restaurants, electricity, and lemons.
Items with falling prices included onions, LP gas, nopal, squash, regular gasoline, melon, chayote, green beans, poblano peppers, and diapers.
This inflation update reflects the intricate interplay of policy shifts, consumer pricing, and market anticipations impacting Mexico’s economy.