Inflation in Mexico Slows Down

Annual general inflation eased its pace in August, standing at 4.99 percent, breaking a five-month streak of consecutive increases, according to figures from the National Institute of Statistics and Geography (Inegi).

This decline was primarily driven by a significant drop in fruit and vegetable prices, which fell from an annual increase of 23.55 percent in July to 12.61 percent in August. Meanwhile, agricultural products saw their annual growth fall from 13.72 percent to 9.45 percent during the same comparison period.

Among the standout decreases were chayote, down 61.07 percent monthly; green beans, down 20.78 percent; serrano peppers, down 17.44 percent; tomatillo, down 16.82 percent; poblano peppers, down 15.33 percent; and guava, down 13.53 percent.

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Tomatoes also saw a price drop of 10.07 percent monthly. According to Ivex Analysis, this food item had experienced the largest increase in weighting in Inegi's latest update. Additionally, the cost of air transportation saw a 14.76 percent monthly decline.

However, most of the products that contributed to inflation increases remained agricultural.

It is also noteworthy that movements within the National Consumer Price Index (INPC) are not only due to price dynamics but also reflect changes in weightings made during the second half of August, said Marcos D. Arias Novelo, Economic Analysis Supervisor at Deloitte.

On August 22, Inegi published a new National Consumer Price Index (INPC), updating the weightings and constructing a new basket with 292 groups of goods and services, known as generics.