Mexico: Inflation Rate Reaches 8.15%, Marking the Highest Figure in More Than 20 Years

Mexico has reached an inflation rate of 8.15%, which was the highest figure since early 2001. Bank of Mexico is expected to deliver a second straight 75 basis-point increase to its key interest rate this week.

Al Jazeera reported that consumer prices rose 8.15% last month as compared to a year earlier, which is slightly faster than the 8.14% median estimate of economist surveyed by Bloomberg.

Inflation slowed to 0.74% from 0.84% in July. It was compared to economists' median estimate of 0.73%.

Janneth Quiroz Zamora, vice president of economic research at Monex Casa de Bolsa, said that the numbers remain to be "worrying."

Quiroz Zamora said that the number keeps rising despite the movements made by the Bank of Mexico since June last year.

Bank of Mexico Rate Hike

The Bank of Mexico is projected to boost rates by 75 basis points, according to all 22 analysts surveyed by Bloomberg. The bank aims for inflation of 3%, plus or minus 1 percentage point. It started targeting a key rate in 2008, with last month considered to be the biggest basis point hike.

Governor Victoria Rodriguez from the board of the bank said that it plans to continue raising the reference rate and that it will review taking the same forceful measure if needed.

Carlos Capistran, Head of Mexico and Canada economics and Bank of America, said that Bank of Mexico will worry about the large core print. He added that they expect a 75 basis-point hike on Thursday, with risks of a 100 basis-point hike.

Reuters polled economists, who said that they had expected annual headline inflation of 7.62% and annual core inflation of 7.24%.

Mexico's finance ministry explained that figures show inflation is being "controlled" with government fuel subsidies and an anti-inflation plan, which was recently imposed.

Mexico Curbing Rising Inflation Rate

Mexico has raised the country's minimum wage by 22% in 2022, meaning it goes about $8.50 per day. However, much of that increase has now been consumed by inflation, according to a Washington Post report.

The Mexican government's anti-inflation plan includes increasing the production of items such as corn, rice, and beans, ensuring fair prices for a basket of staple foods.

Bank of Mexico deputy governor Jonathan Heath said that the most "worrying thing" is the inflation for food products, which reached its highest rate since 1999.

The rising cost of food products prompted Mexican families to go without some of the costlier items such as meat.

Housewife Carla Valadez had to buy vegetables instead of pork due to the rising prices. Valadez said that they are going to become "vegetarians out of necessity."

Juana Pardo said that what she receives from the government "isn't enough anymore." Pardo is a retiree receiving an $82 per month supplementary pension for the elderly.

This article is owned by Latin Post.

Written by: Mary Webber

WATCH: Mexico unveils anti-inflation plan - from CGTN America