Inflation in April reaches 6.08%; highest level in more than three years

Published May 8, 2021 (sp)

The rise in tomato, avocado, tortillas, among other products, led annual inflation to stand at 6.08 percent, the highest figure since December 2017, the Institute reported. Photo taken from @INEGI_INFORMA’s Twitter feed.

At the close of the fourth month of the year, the National Consumer Price Index (INPC) was 0.33 percent above the level observed in March.

Julio Santaella, president of Inegi, pointed out on his Twitter account that the inflation observed is the highest since December 2017, while Grupo Monex analysts noted that it is the highest level in 25 years.

The result published this Friday is far from the Bank of Mexico’s target, which is 3 percent with a range of one percentage point up or down.

This is explained by the 0.21 percent monthly increase in the non-core price index, which includes the most volatile products such as agricultural products. In its annual measurement, the component stood at 12.34 percent.

The core price index, which includes housing, merchandise and services, showed an increase of 0.37 percent compared to the previous month, while in its annual comparison it stood at 4.13 percent.

The products with the highest increase in April were tomato with 26.09 percent monthly, avocado with 29.46 percent, serrano chili with 41.75 percent and corn tortilla with 1.83 percent. On the contrary, electric energy decreased 12.03 percent monthly due to adjustments in electricity rates in 18 cities in the country during the warm season.

Mexico City. The rise in tomato, avocado, tortillas, among other products in the month of April led annual inflation to stand at 6.08 percent, the highest figure since December 2017, the National Institute of Statistics and Geography (Inegi) reported this Friday.

At the close of the fourth month of the year, the National Consumer Price Index (INPC) was 0.33 percent above the level observed in March.

Julio Santaella, president of Inegi, pointed out on his Twitter account that the inflation observed is the highest since December 2017, while analysts at Grupo Monex noted that it is the highest level in 25 years.

The result published this Friday is far from the Bank of Mexico’s target, which is 3 percent with a range of one percentage point up or down.

This is explained by the 0.21 percent monthly increase in the non-core price index, which includes the most volatile products such as agricultural products. In its annual measurement, the component stood at 12.34 percent.

The core price index, which includes housing, merchandise and services, showed an increase of 0.37 percent compared to the previous month, while in its annual comparison it stood at 4.13 percent.

The products with the highest increase in April were tomato with 26.09 percent monthly, avocado with 29.46 percent, serrano chili with 41.75 percent and corn tortilla with 1.83 percent. On the other hand, electricity decreased 12.03 percent monthly due to adjustments in electricity rates in 18 cities in the country during the warm season.

Santaella highlighted that in view of the increase in the international price of corn, it is of interest that the annual variation in the producer price of corn shows an upward trend reaching 14.74 percent in April, while the price of corn flour has been more stable at 4.29 percent.

Citibanamex analysts pointed out that this is the highest inflation for an April month since 2009, when the global financial crisis occurred. They estimated that going forward, annual inflation will begin a modest downward trend, mainly as a result of favorable comparison base effects. They added that they expect 2021 to close at 5.1 percent.

Monex analysts commented that the deviation from the controlled inflation scenario proposed just a few months ago is considerable and it is unlikely to return to within the BdeM’s range.