From December 2018 to September 2024, general inflation in Mexico will have accumulated an estimated growth of 33%, the highest rate for a similar period since the government of Ernesto Zedillo. when the price increase was 220%.
Based on the same number of months for each government, inflation in the administration of Enrique Peña Nieto was 26%; with Felipe Calderón, 27%, and with Vicente Fox, 29%, according to Inegi data.
During Zedillo’s six-year term, the national economy dragged along the inertia of very high inflation, which was complicated by the 1995 crisis. while the government of Andrés Manuel López Obrador suffered collateral damage from the COVID-19 pandemic and the global rise in food prices due to Russia’s invasion of Ukraine, explained James Salazar, deputy director of economic analysis at CI Banco.
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Food situation
By product group, the greatest increase in this six-year period was recorded in the prices of agricultural products, especially fruits and vegetables, with an increase of 49% from the second half of November 2018 to the first half of the current month; in livestock goods, 48%, and in manufactured foods, 51%.
The prices of these generics have a significant impact on the economy of households with fewer resources in the country.
The most volatile were the farm goods, among which orange stands out, with an increase of 242% in this six-year period; lemon, 170%; grapefruit, 130%; avocado, 99%; carrot, 94%, and banana, 92%.
Among processed foods, the egg, with a six-year increase of 77%; wheat flour, 74%; soup pastas, 71%; vegetable oils and fats, 70%; packaged chiles, 70%; wheat flour tortillas, 69%; white bread, 68%; sweet bread, 65%; dough and corn flour, 61%; sugar, 59%, and corn tortillas, the basis of the Mexican diet, with 54%.
Pandemic and war
In the first year of the pandemic, inflation decreased because demand had fallen and prices fell, Salazar explained.
Then came a gradual reopening of the economy, but this recovery in demand was not accompanied by an increase in supply; On the contrary, he added, there was a restrictive supply due to the breaking of global chains, so that there were delays in production and in the delivery of goods or supplies due to regional divergences regarding how the pandemic was dealt with. Excess demand and restricted supply contributed to prices reaching highs in two decades in Mexico and four decades in the United States, the specialist highlighted.
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The problem began to be noticed in the electronic, automotive and Then it came to others such as electric, which put pressure on prices.
Geopolitical conflicts began with an effect focused on grains due to the importance of Russia and Ukraine in the production of corn, wheat and sorghum, Salazar detailed.
The above generated contagion effects in most of the assets, and in the end “It was a global phenomenon from which Mexico was not exempt,” he mentioned.
Thus, during the six-year term, inflation began as a demand issue, and It was later maintained due to problems in the offer, Salazar said.
Resistance to lower
Inflation is gradually being resolved, especially in terms of goodsbut services continue to be under pressure since they were the ones that took the longest to recover from the blow of the pandemic and remain high, said the specialist.
Since August 2022, the annual increase in services has maintained a rate above 5.0%. So far this six-year term they have accumulated an increase of 27%, highlighting education, with 29%, and housing, with 19%.
Private preschool education services accumulate an increase in government of 33.4%; in primary, 32%; high school, 29%; secondary, 28%; university, 28%; nurseries and stays, 27%, and short careers, 21%.
In “other services” the increase in prices of lunch shops and restaurants that have been affected by the increase in food prices and salary increases stands out. The most notable case is that of loncherías, torterías and taquerías, with a six-year accumulated increase of 55%.
Despite this resistance of some prices to lowering, Salazar believed that inflation will continue its downward trend, but moderately. The Inegi reported yesterday that inflation reached 4.7% annually in the first half of September, lower than that reported at the end of August.
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