Inflation rises in Mexico to 6.08 %, highest rate since the end of 2017

RIO DE JANEIRO, BRAZIL – The Mexican inflation rate rose in April to 6.08 %, the highest since the end of 2017, after prices rose in the fourth month of the year by 0.33 %, the National Institute of Statistics and Geography (Inegi) reported Friday.

“The national consumer price index increased 0.33 % month-over-month in April 2021, the largest increase for that month since 2009. At an annual rate, inflation stood at 6.08 % year over year, the highest inflation rate since December 2017,” Inegi president Julio A. Santaella said on Twitter.

April became the fourth consecutive month of the rising inflation rate, after in January it rose to 3.54 %, in February it rose to 3.76 %, and in March, it climbed to 4.67 %.

In April 2020, the corresponding data reflected a 1.01% drop in the consumer price index (CPI), bringing inflation to 2.15%.

The underlying price index is considered a better parameter to measure the general price levels because it eliminates items with high volatility in their prices, increased 0.37 % monthly, and left the annual rate at 4.13 %, Inegi said.

Within the subgroup of basic goods and services, merchandise increased 0.44 %, and services grew 0.28 %, with an annual rate of 5.59 % and 2.53 %, respectively.

In non-core services, agricultural prices rose 2.61% over the previous month, and energy and government-authorized tariffs fell 1.49%. Every year, agricultural prices rose by only 4.08%, while energy tariffs soared by 19.30%. Thus, the non-core item rose 0.21 % month-on-month and 12.34 % year-on-year.

The minimum consumption basket price index, made up of 176 products and services, rose 0.22% month-over-month, for an annual increase of 7.47%.

Inegi also announced that in April, the producer price index, including oil, showed an increase of 0.22% with respect to the previous month, reaching an annual variation of 4.92%.

Mexico’s economic reactivation came after two months of suspension of all non-essential economic activities in April and May 2020 due to the coronavirus crisis, which strongly impacted production and consumption.

Inflation in 2020 closed at 3.15%, while in 2019, annual inflation was 2.83%, and in 2018, consumer prices rose by 4.83%.

The Bank of Mexico’s inflation target is 3 % per year.