MEXICO CITY: Mexico’s year-on-year inflation increased to 4.9 percent in August, its highest level in five months due to gas and agribusiness, the National Institute of Statistics and Geography (INEGI) said on Friday.
The National Consumer Price Index held steady at 4.81 percent until July, according to data from INEGI, reports Xinhua.The August levels were the highest since the 5.04 percent inflation rate registered in March.
In the eighth month of the year alone, inflation was 0.58 percent, its highest level for a similar month in a decade, INEGI president Julio Santaella said via his Twitter account. INEGI’s monthly report indicated that prices of low octane gas increased 2.73 percent, followed by tomatoes with a 20.78 percent increase and onions with a 42.50 percent increase.
In contrast, air transportation costs fell by 21.81 percent; chicken prices fell 2.73 percent and packaged tourism services fell 9.24 percent, according to INEGI.
The data from INEGI has a new methodology base which has been in use since the first half of August. It includes an updated basket of products and a sample with greater territorial coverage.
In a report to its customers, the private bank Ve por Mas (BX+), said it raised it inflation outlook for the end of the year to 4.5 percent up from 4.2 percent based on the changed methodology.
“Derived from the previous data, and that the increase in energy is expected to have a temporary effect, among other factors, we do not rule a scenario in which Banxico decides to keep the target rate unchanged at its next meeting,” said the bank’s analyst Javier Saldana.The next governing board meeting of Banxico, Mexico’s central bank, is scheduled for Oct. 4.
Since December 2015, the central bank has raised the key interest rate on several occasions as a way to contain inflationary pressures, so the cost of credit went from 3.0 percent to the current 7.75 percent.
On Aug. 29, Banxico warned that the convergence of inflation to the 3.0 percent target could take longer than expected due to the increases in the prices of some energy products such as gasoline.
In 2017, inflation in Mexico closed at 6.77 percent, its highest level in more than 16 years.