Vegetables bring inflation to 3.92% in the first half of February

General inflation in Mexico surprised upwards in the first half of February, mainly due to the increase in the prices of fruits and vegetables, led by tomatoes, potatoes, tomatoes and lemons, as well as processed foods and services, revealed data from the National Institute of Statistics and Geography (Inegi).

In the first half of February, the National Consumer Price Index (INPC) registered a biweekly increase of 0.25 percent, above the 0.18 percent anticipated by the market. In annual terms, general inflation accelerated to 3.92 percent from the 3.82 percent observed in the last 15 days of January, and above the 3.89 percent expected by the market.

The increase in general inflation, which linked three periods of increase in its annual measurement, was explained above all by the increase in fruits and vegetables, which reached 2.10 percent fortnightly and 5.61 percent annually. Tomatoes had a biweekly increase of 7.9 percent and 33.21 percent in the last 12 months. For their part, potatoes, tomatoes and lemons rose 13.16, 17.84 and 17.03 percent biweekly, respectively.

The underlying component, which represents around 76 percent of the INPC and excludes the most volatile prices, registered a biweekly increase of 0.22 percent, while the annual variation was 4.52 percent.

Within this component, merchandise prices increased 0.2 percent in the first half of February and 4.6 percent annually, driven by the upward trend in food, beverages and tobacco, which rose 6.28 percent annually. For their part, services advanced 4.44 percent annually, and the pressure exerted by areas such as education (6.05 percent) and other services (5.21) stood out.

For its part, non-core inflation, which includes agricultural and energy products and tariffs authorized by the government, rose 0.32 percent every two weeks, while the annual rate rose from 1.34 percent in the second half of January to 1.92 percent in the first 15 days of February.

The economic studies area of ​​Banamex highlighted that the biweekly inflation of agricultural products was the highest for a similar fortnight since 1995. The general inflation also responded to increases in the prices of processed foods, and housing, university and food services.

“The surprise is mainly due to a greater than estimated increase in the prices of fruits and vegetables such as tomatoes, green tomatoes, potatoes and lemons, which was partially offset by a lower than projected increase in the merchandise component (in the context of very gradual effects of higher tariffs on countries with which Mexico does not have free trade agreements and the appreciation of the exchange rate),” Banamex detailed.