Mexico: inflation soars to 7.05% in November, highest level in 20 years

President López Obrador has pointed out that inflation is not a problem unique to Mexico but is a "global phenomenon" driven by rising prices and electricity tariffs
El presidente mexicano Andrés Manuel López Obrador en una rueda de prensa en el Palacio Nacional en Ciudad de México

AP/EDUARDO VERDUGO  -   Mexican President Andrés Manuel López Obrador at a press conference at the National Palace in Mexico City.

During the first half of November, Mexico has seen the country's inflation rate rise to 7.05% year-on-year, reaching its highest point since 2001, according to data from the National Institute of Statistics and Geography (INEGI).
 
The inflation index rose by 0.69% compared to the second half of October. In the same period, core inflation rose by 0.15% and by 5.53% on an annual basis, a figure not seen since April 2009. On the other hand, non-core inflation, which refers to volatile products, rose by 2.29% fortnight-on-week and 11.68% year-on-year.
 
The energy sector showed the highest annual change, rising by 15.2% y-o-y, fruit and vegetables were up by 13.3%. Goods and services rose by 7 and 3.8% in the same time period.
 
Electricity rose by 24% fortnightly during November, and green tomatoes by 42%. As a measure, INEGI has pointed out the need to consider public subsidies to reduce electricity tariffs, especially during the summer in several cities in the country.

Inflation: a growing problem

The Bank of Mexico, the body in charge of controlling price rises, has implemented measures in recent months to try to contain inflation, choosing to raise interest rates to 5% in November, although it has not achieved the expected target.

The agency argued that "headline and core inflation expectations for 2021, the next 12 months and 2022 increased again, while long-term inflation expectations have remained stable at levels above the target", in support of the measures established. 

bolsa de valores mexico
REUTERS/TOYA SARDO JORDAN - Mexican Stock Exchange in Mexico City

The phenomenon of inflation is a growing problem worldwide, and the main cause of the current situation is the economic recovery after the pandemic, together with other important factors such as the scarcity of raw materials and the maritime transport crisis, which, together, are pushing prices towards higher values.  

In Mexico, despite some recovery, the data reveal a major problem in the country's recovery, stemming from higher food and electricity prices.
 
The United States, one of the most important powers and Mexico's main trading partner, experienced an increase of 6.2 per cent last October, which is the worst record in the last 30 years.
 
"It is a global phenomenon, there is a post-pandemic crisis that is manifesting itself in all countries. We have inflation equal to that of the United States; generally, Mexico's inflation is higher than that of the United States and in this case it is the same. They also have an inflation rate of 6%, Brazil 11%, it is a phenomenon that is affecting", said Mexican President López Obrador, maintaining his optimism despite the historic inflation figure for November. 

Latin America Coordinator: José Antonio Sierra.