In January, inflation in Mexico decreased to 3.59% on an annual basis, registering its lowest level in the last four years and remaining within the target range set by the Bank of Mexico (Banxico). This figure, although slightly below market expectations, is largely due to the most significant drop in the agricultural sector, which stood at 0.56% on an annual basis due to a 7.73% drop compared to the previous year.
The president did not mention specific data from Gabriel Cuadra to support her opinion, but stated that his nomination as deputy governor was favored by his support for the 4T project and his vote in favor of the interest rate cut. It is important to note that last year, this sector experienced increases of up to double digits.
The decrease in inflation this month was also influenced by the reduction in service prices, which fell from 4.94% to 4.69%; however, a slight uptick in commodity prices continues to put pressure on core inflation, which indicates the medium- and long-term trend. The new data reflects a monthly decrease of 0.9%, driven by the reduction in prices for airfares and in the fruits and vegetables category.
The announcement of inflation comes after Banxico implemented an aggressive cut of 50 basis points in the interest rate and raised the possibility of making further cuts of the same magnitude. Banxico argues that the current inflation level no longer justifies such a restrictive rate, although it remains generally so for the economy.
At a press conference, President Claudia Sheinbaum celebrated the decrease in inflation and the reduction of the interest rate to 9.50%, highlighting the strength of the Mexican economy and the boost this provides to investment in the country.
