Inflation reaches 8.62% in Mexico

Fernando A. Mora Guillen.

  • Inflation reaches 8.62% in Mexico.
  • The US confirms a 0.1% decline in its economy in the second quarter.
  • Mexico avoids reaching a panel to resolve differences in T-MEC on energy policy.

The increase in prices is out of control in Mexico. The annual rate of general inflation was 8.62 percent in the first half of August, according to the National Consumer Price Index published by the National Institute of Statistics and Geography (INEGI). With an increase of 0.42% compared to last month, inflation has reached its highest level since August 2000.

The purchase of food is the one that puts the most pressure on the pocket of Mexicans. Legumes and fresh vegetables are the ones that have presented the most increases, such as onion, which has risen in price 37.6% compared to the last fortnight of July, potatoes rose 2.36% and corn tortillas became more expensive 1, 56% in the same period.

The increase has exceeded all market expectations. According to the latest Citibanamex expectations survey, inflation was not expected to exceed 8.52%, while this level has risen 16 months in a row the Bank of Mexico’s inflation forecast.

And it is that Mexico is no stranger to the geopolitical conflicts that have caused price increases throughout the world. Added to the lower economic growth are strong inflationary pressures, low dynamism in job creation, falls in investment and growing social demands.

It is time to resist, the United States central bank raised its rates by 75 basis points in July to a range between 2.25% and 2.5%, after having carried out an equal increase in June and others to a lesser extent. magnitude in the year, to mitigate an inflation that is at a maximum of 40 years.

Banxico will have to anticipate to avoid flight of portfolio investment. Analysts consider that in the face of inflationary pressures and the adjustments planned by the Fed, Banxico will continue to move upwards to levels of 11% in 2023, for which they foresee another adjustment of 75 basis points at the November meeting.

Take it with interest.- The US Government confirmed that the country’s economy fell by 0.1% in the second quarter of the year and fell at an annual rate of 0.6%.

It is the third and last official calculation of the economic evolution of the country published by the Bureau of Labor Statistics (BEA), which confirms the technical recession of the world’s largest economy, registering two consecutive quarters of decline of 0.4% in January to March and one tenth from April to June.

The BEA recalled that these data were produced in a context of high inflation and increases in interest rates to tackle it and with other challenges such as problems in the supply chain.

The decline in the second quarter reflects, above all, the falls on the investment side -both private and residential- and on the side of public spending, both federal, state and local.

Falls that were partially offset by the increase in exports and consumer spending.

Imports also rose, which negatively affects the calculation of the Gross Domestic Product (GDP).

The two quarters of the fall in GDP confirm the technical recession of the world’s leading economy, although the Biden administration has insisted at all times that the United States is not in a recession.

The truth is that the United States has been trying to contain prices for months and the Federal Reserve approved the fifth consecutive rise in interest rates, which are already in a range of between 3 and 3.25%, the highest level in the last 14 years.

The inflation rate in the United States is declining although it remains very high, at 8.3% in August.

Take it carefully.- The Mexican government stated that it hopes not to reach a panel to resolve differences over energy policy with the United States and Canada. The head of North America of the Ministry of Foreign Affairs, Roberto Velasco, mentioned: – “I would say that the three countries are avoiding reaching a panel, we are looking for solutions and we will probably continue in the consultation talks.”

In principle, on October 3, the initial consultation period ends; however, by agreement of the parties, this period could be extended. Therefore, time will have to be given.

Twitter: @Fernando_MoraG

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*Master in Institutional Communication from the UnivPan American ersity.

*Founding member of the National College of Graduates in Journalism.

*President of the Fernando Mora Gómez Foundation for Freedom of Expression.

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