In June 2024, Mexico experienced an unexpected inflation surge, primarily driven by rising fruit and vegetable prices.This increase saw inflation jump by 0.38% compared to May, pushing the annual inflation rate to 4.98%, according to the National Institute of Statistics and Geography (Inegi).In comparison, the rate was 5.06% in June 2023.
This spike erased a years worth of progress in price stabilization.
Analysts had forecast an annual inflation rate of 4.87%, as per a Bloomberg survey.The discrepancy underscores the volatile nature of inflation, which is influenced by various market and economic factors.Following Mexicos recent elections, the financial markets closely monitored Junes inflation data.Mexicos Inflation Hits 4.98% in June, Surpassing Expectations.
(Photo Internet reproduction)Post-election exchange rate fluctuations, resulting from Morenas victory in Congress and Claudia Sheinbaums presidential candidacy, added to the uncertainty.Analysts focused on core inflation and its merchandise component, anticipating impacts from the pesos depreciation against the dollar.Core inflation, a key metric for the Bank of Mexicos monetary policy, actually decelerated.It increased by 0.22% monthly, reaching 4.13% annually, just below the 4.14% predicted by Bloombergs analysts and down from Mays 4.21%.Surge in Non-Core Inflation Driven by Food PricesDespite this, non-core inflation, driven by volatile items like food, surged.
Non-core inflation rose by 0.87% monthly and 7.67% annually, marking the highest rate since October 2022.Within this category, fruits and vegetables saw significant price hikes.
Monthly, these items increased by 3.27%, with an annual rise of 19.73%.Six of the ten products most affecting the National Consumer Price Index (INPC) were agricultural.Chayote led with a 128.58% monthly price jump, followed by oranges at 31.37%, avocados at 17.65%, lettuce and cabbage at 21.87%, and bananas at 13.98%.Conversely, prices for tomatoes, serrano peppers, eggs, grapes, fresh chilies, lemons, poblano peppers, and sugar decreased from the previous month.This inflation surge matters because it affects household budgets, purchasing power, and overall economic stability.Monitoring these trends helps policymakers and consumers navigate the economic landscape.