Inflation in Mexico Hits 8.15 Percent in July: INEGIBy Sofía Hanna | Tue, 08/09/2022 - 17:29
Mexico’s inflation rate hit 8.15 percent in July 2022, a rise from the previous month’s 7.99 percent, reports the National Institute of Statistics and Geography (INEGI). Core inflation increased by 0.62 percent in June, while non-core inflation increased by 1.09 percent. These inflation levels have not been seen since the end of 2000 and could lead the Bank of Mexico (Banxico) to continue to tighten its monetary policy and increase its interest rate by another 75 base points.
The accelerated increase of inflation in the country could have severe repercussions, especially among the lower-income population, warns the International Monetary Fund (IMF). According to INEGI’s report, prices are rising again across the board, leading Mexicans to change their consumer behavior and making bulk sales much more attractive. The Anti-Inflation and Deficiency Package (PACIC), which was designed as a tool to fight inflation, has not met its objective. In fact, it has only contained the advancement of inflation, as previously reported by MBN.
According to the National Index of Consumer Prices (INPC), in July 2022, underlying and non-core price indices (CPI) reached 8.15 percent, while the underlying and non-core indexes were at 7.65 percent and 9.65 percent, respectively. In the same period of 2021, the CPI hit 5.81 percent, and its component indexes hit 4.66 percent and 9.39 percent, respectively, as reported by Tukan.
In July 2022, the main products reporting price increases were eggs, potatoes, tortillas, oranges, onions, soft drinks, green tomatoes and meat. Restaurant visits and housing were also more expensive. As a result of the price increase, PROFECO reviewed the different price ranges of supermarket chains. Ricardo Sheffield, Consumer Ombudsman, explained that since the anti-inflation agreement went into effect, the basic food basket at HEB and La Comer supermarket chains has been priced at MX$1,310.14 (US$64) and MX$1,288.44 (US$62), respectively. According to PROFECO, the central supply centers continue to be the cheapest option for acquiring the 24 products of the basic food basket, with a sustained price of MX$1,054.22 (US$51).
As volatility becomes the new normal, Banxico will discuss the effects of the skyrocketing inflation in its next meeting, in which a rate increase looks likely.