October Sees Inflation Spike; Prices of Fruits and Vegetables Soar

In October, inflation picked up again, ending two months of consecutive decline, according to data released by Inegi on Tuesday. The national consumer price index (INPC rose to 4.76% year-over-year for last month. During this period, fruits and vegetables saw the highest price increase (15.9%), as stated by the National Institute of Statistics and Geography in a statement.

The products with the biggest price increases were: Nopales: 34.67% Papaya: 26.85% Tomatillo: 23.06% Zucchini: 19.86% Electricity: 18.07% Tomato: 15.82% Onion: 7.22% On the other hand, those that saw the biggest drops were: Lime: -22.07% Orange: -14.62% Bananas: -12.16% Avocado: -7.46% LP gas: -2.5% Monetary Policy

The core index, considered a more accurate indicator for assessing inflation, stood at 3.8% year-over-year in October, while non-core inflation reached 7.68%. Citibanamex had anticipated that overall inflation would be 4.73% and core inflation would be 3.84%. Month-over-month, overall inflation grew by 0.55%, while the core and non-core indices increased by 0.28% and 1.46%, respectively. Within the core inflation index - in annual terms - other services experienced the highest increase at 5.85%, followed by education (tuition fees) with a rise of 5.79%, and services in general grew by 4.98%. Regarding the non-core index, both fruits and vegetables and agricultural products showed double-digit increases at 15.9% and 10.92%, respectively, followed by livestock products (6.17%), energy products (5.1%), and government-approved energy tariffs (4.62%). According to Inegi, the rise in energy products and government-approved tariffs was largely due to the ending of the summer electric tariff subsidy in 18 cities across the country where the INPC is monitored. According to Inegi, these are the products that experienced the highest monthly variation: Additionally, these are the products that showed the greatest price decreases: This year, the Bank of Mexico has cut its interest rate three times, each by 25 basis points, leaving it at 10.50%. According to the minutes from the meeting, the governing board anticipates that the gradual cooling of inflation will allow for further adjustments in credit costs going forward. The central bank has two monetary policy meetings scheduled before the end of the year - on November 14 and December 19 - and its most recent survey of private analysts indicated that the rate is expected to close at 10% in 2024 and at 8% the following year. According to Reuters

The current inflation situation in Mexico highlights the need for a constant focus on financial planning at both personal and business levels. With the rising costs of essential goods, it is vital for consumers to review their budgets and take steps to adjust their spending. Furthermore, the decisions of the Bank of Mexico regarding interest rates may present opportunities or risks for investments, making it crucial to stay informed about the economic landscape and adapt to changes.