Inflation Rises in the First Half of August

Inflation in Mexico has risen for the second consecutive two-week period in the first half of August, putting pressure on the services sector, according to data from the National Institute of Statistics and Geography (Inegi).

The INEGI report showed that, in the first half of August, the National Consumer Price Index (INPC) rose by 0.10% over the two-week period, bringing the annual inflation rate to 3.26%.

Similarly, inflation also rose from the previous reading of 3.14% annually, marking two consecutive two-week periods of increase, while remaining within the Bank of Mexico’s (Banxico) target range of 3% ± 1 percentage point for the sixth consecutive two-week period.

At the central bank's latest monetary policy meeting, the focus was on pressures in the services sector, where four of the five members of the Governing Board highlighted the persistence of high inflation in that sector, which is a major cause for concern.

The INEGI report notes that the biggest source of inflationary pressure this month has been the price of services, within core inflation, and excludes goods and services with the most volatile prices from its calculation.

Consequently, in the first half of August, the price of services rose 4.34% year-over-year, while goods posted an inflation rate of 3.51%. As a result, core inflation stood at 3.93% year-over-year in the first half of August.

It has been reported that agricultural prices fell by 1.84%, while inflation for energy products and government-regulated rates stood at 3.27% annually.