Inflation in Mexico in August 2023: On the Decline

Inflation in Mexico in August 2023 reaffirms the efforts of the government led by Andrés Manuel López Obrador.

Inflation in Mexico in August 2023 continues to move towards the target set by the Bank of Mexico (Banxico).

Despite certain indicators still falling outside the objectives, inflation in Mexico reached its lowest level in over two years in August. This is confirmed by the report released by the National Institute of Statistics and Geography (Inegi).

In August, the National Consumer Price Index (INPC) increased by 0.55% on a monthly basis, resulting in an annual inflation rate of 4.64%.

With this data for inflation in Mexico in August 2023, there have been seven consecutive months of deceleration.

On the other hand, it has reached its lowest level since February 2021 when it stood at 3.76 percent.

Inflation in Mexico in August 2023 is slightly above the market’s expectation, which anticipated a rate of 4.61%, according to a Reuters survey.

Inflation in Mexico has slowed down in recent months after reaching levels not seen in two decades last year.

However, it still remains above the Banxico‘s target of 3% +/-1 percentage point. Meanwhile, the Central Bank of Mexico, under the leadership of Victoria Rodríguez Ceja, has paused interest rate hikes.

Inflation in Mexico August 2023

Nevertheless, it has indicated that it will maintain its rate at 11.25% for a longer period to achieve inflation convergence.

The Inegi report detailed that core inflation, which excludes goods and services with more volatile prices, stood at 6.08%.

Within this category, prices of goods increased by 6.86% on an annual basis, while services showed an annual inflation rate of 5.15 percent.

Likewise, non-core inflation saw a much smaller price increase with a rate of 0.37 percent.

Within this category, agricultural and livestock products saw a price increase of 3.94%, while energy and government-authorized tariffs decreased by 2.68 percent.

Inflation in Mexico in August 2023 reflects the efforts to curb price increases, a strategy that has been in place since 2022 with positive results.

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