There is no possible brake to stop the price increase in Mexico. General inflation in the country was 8.15% in July 2022, which is the highest rate in the last 22 years, when the rate was 9.12% in July 2000. According to the National Index of Consumer Prices, released this Tuesday by the National Institute of Statistics and Geography (Inegi), the inflation rate showed a change of 0.74% compared to June this year. This is a dramatic jump compared to last year’s index, when the annualized rate was 5.81%.
Meanwhile, core inflation, which excludes fresh food or energy due to their volatility, rose 7.65% from July last year, the highest since July 2000. In addition, non-core inflation rose 1.09% on the month July and reached 9.65% APR. It is agricultural product prices that have risen the most, rising 1.64%, while energy tariffs and government-approved tariffs are up 0.63% monthly.
Despite the fact that the Mexican government has announced several measures to control inflation, food prices continue to cause problems for Mexicans’ personal finances. The egg was the biggest contributor to inflation in July, rising 8.31% monthly, while the orange rose 15.51%, the onion 13.79%, the potato 11.96% and the green tomato of 20.41%. compared to June 2022.
Inflation numbers are released two days ahead of the Bank of Mexico’s monetary policy meeting. According to the figures released by the Inegi, analysts are expecting a strong reaction from the Board of Directors with a new increase in the interest rate, which currently stands at 7.75%, the highest level in 14 years, a measure with which the central bank wants to stop the inflation that persists in the country. “The expectation is maintained that inflation could reach 8.7% annually by the end of the year. With this inflation data, the Bank of Mexico is expected to raise its interest rate by 75 basis points to a level of 8.5%,” commented Gabriela Siller, director of economic analysis at Banco Base.
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