Annual inflation in Mexico rose to 7.05 percent during the first half of November — the highest rate since April 2001, the National Statistics Bureau (INEGI) reported this week.
Price increases in food, LP gas and electricity have driven inflation well above the Banco de Mexico’s target of three percent. Meanwhile, core inflation (the price change of goods and services minus food and energy) grew to 5.53 percent, the highest since April 2009.
President Andres Manuel Lopez Obrador minimized the figures, noting that “post-pandemic inflation” is affecting all countries of the region, including the United States, which registered an increase of 6.2 percent in October, the worst figure in 30 years. Inflation this month in Brazil was 10.7 percent and a staggering 52 percent in Argentina.
Inegi said ending public subsidies to support electricity rates during the summer season in several cities in the north of the country contributed to this month’s high inflation numbers.
To stabilize electricity prices, Lopez Obrador called on federal legislators to approve his package of energy reforms, which have been widely criticized — particularly in the United States — for limiting private participation in the sector, and focusing on fossil fuels rather than clean energy.
In a predictable move given the inflation rises, the Banco de Mexico earlier this month raised interest rates to five percent.