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Consumer inflation registered a slowdown in the first half of the year, which was in line with market expectations, according to data released by the National Institute of Statistics and Geography (Inegi).

In the first 15 days of 2022, the National Consumer Price Index (INPC) showed a fortnightly advance of 0.39%, while in annual comparison prices showed an increase of 7.13 percent.

With this, inflation slowed down from the figure of 7.26% in the last fortnight of 2021, and fell for three consecutive fortnights; however, it is the highest rate recorded for the beginning of the year since 2001, when inflation at the beginning of the year was 8.37 percent.

The data was in line with market expectations, which according to a Reuters poll expected inflation of 7.13%, this due to less pressure in the non-core item; however, core inflation would continue to be the main pressure.

Since last year, consumer prices have put different nations in check due to the high levels they have presented in a situation where the reactivation of the economy has increased the demand for certain products, but at the same time supply shocks are generated and shortage of certain goods.

In this way, since March of last year, inflation has been above the Bank of Mexico’s (Banxico) target of 3% +/-1 percentage point, and has led the central bank to increase its reference rate.

food press

Within the report, it was observed that the greatest pressure was caused in the underlying item, which is the one that Banxico considers for decision-making and the one that has been most affected by the pressures due to the greater demand for certain merchandise. Thus, this item reached an annual rate of 6.11 percent.

Within core inflation, it was observed that food, beverages and tobacco had the highest incidence, that is, a greater weight in the general index. These goods became more expensive 8.67% annually in the first fortnight of the year, while non-food merchandise rose 6.81 percent.

At the beginning of the year, the IEPS for soft drinks and cigarettes was updated, which meant that, for example, the latter showed an increase in their sale price, going from 66 to 70 pesos in some cities of the country.

In the case of services, these maintained lower inflation, with an annual increase of 4.24 percent.

Non-core inflation, for its part, showed a rate of 10.21% in the first half of January. Inside, the pressures originated in fruits and vegetables, whose rise was 19.64%, while energy products 7.83 percent.

Lemon, for heaven’s sake

Since the beginning of the year, it was reported that the price of lemons began to rise, reaching, in some cities, 80 pesos per kilo. According to the Inegi, it was this generic with an upward price that had the greatest weight in fortnightly inflation, since it rose 36.84% compared to the previous fortnight.

It was followed by gasoline magna, which although its increase was only 0.98%, the weight it had in the general index was greater. Meanwhile, lunch shops, fondas, torterías and taquerías became more expensive 0.92%, while potatoes and other tubers 11.62% and cigarettes 3.62 percent.

In contrast, the goods and products with falling prices that showed a greater weight in inflation were tomatoes, whose price decreased 15.21% in the first fortnight of the year. It was followed by air transport and tourist package services, with 33.66 and 12.41% respectively.

Meanwhile, domestic LP gas decreased its price by 1.14% and green tomato by 10.93 percent.

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