Mexicos inflation rate began 2025 on a positive note, with a significant slowdown in January.
The National Consumer Price Index (INPC) recorded a monthly variation of 0.29%, bringing the annual inflation rate to 3.59%.This data was provided by the National Institute of Statistics and Geography (Inegi).
This marks the lowest inflation rate since January 2021 and falls within the Bank of Mexicos (Banxico) target range of 3% 1 percentage point.The slowdown in inflation provides Banxico with more room to continue lowering interest rates.
Just last Thursday, the central bank, led by Victoria Rodrguez Ceja, cut the interest rate by 50 basis points, bringing it to 9.50%.Rodrguez Ceja indicated that further rate cuts of similar magnitude could follow, despite recent uncertainties caused by Donald Trumps return to the United States presidency.The core inflation rate, which excludes volatile items like energy and fresh foods, also saw a slight acceleration, rising from 3.65% to 3.66% in January.
This increase was driven by a 2.74% rise in merchandise prices and a 4.69% increase in service costs.Mexicos Inflation Slows Down to 3.59% in January 2025, Marking a Four-Year Low.
(Photo Internet reproduction)However, non-core inflation, which includes these volatile items, showed a significant deceleration, dropping from 5.95% to 3.34% annually.
This was largely due to a 7.73% decrease in fruit and vegetable prices.Mexicos Inflation SlowdownThe energy and government-authorized tariffs sector experienced a 5.33% annual inflation rate in January.
This sector includes items like gasoline and electricity, which are subject to government regulation and can significantly impact overall inflation.The slowdown in inflation is a positive sign for Mexicos economy, as it allows Banxico to continue its cycle of rate cuts while maintaining a restrictive stance.
This approach aims to support economic growth without fueling inflation.The central bank anticipates that the current inflationary environment will allow for more rate cuts throughout the year.
These cuts could further stimulate economic activity.In summary, Mexicos inflation rate has shown a promising decline, reaching its lowest level in four years.
This trend allows the central bank to ease monetary policy, potentially boosting economic growth amid global uncertainties.