Fruits and vegetables are down... but eggs and meat are up

During the first half of February, consumer price inflation rose 0.15% to reach 3.74% at an annual rate, with a slight rebound. The price variation was mainly driven by the increase in livestock products ( beef and chicken , eggs, among others) and some services, such as food, housing and university, partially offset by the fall in the prices of fruits and vegetables .

In the case of underlying inflation, it stood at 0.27% biweekly and the annual rate was 3.63% .

An analysis by Bx+ considered market volatility as an upward risk to inflation and projects that the Bank of Mexico has room to cautiously recalibrate its monetary stance.

"However, the majority of the Governing Board seems inclined to repeat a super cut in rates in March, like the one this month (of 50 basis points)," said an analysis by Alejandro Saldaña , chief economist at the bank.

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Within the economy, the slowdown in food goods was offset by pressure on non-food goods, which accelerated for the sixth consecutive reading and, it should be noted, tend to be more sensitive to the pass-through effect of the exchange rate.

After slowing in January, services rebounded, particularly in the educational sector and services other than housing and education.

Services have remained at a growth rate of less than 6% since the end of October, in a context of low economic growth, although they still show a dynamism well above their historical average.

Inflation trending downwards...

In this regard, Banamex considered that general inflation will continue its slight downward trend and this year could close at 3.8%.

Although "we do not see conditions for significant additional decreases in this component considering that it is located well below its long-term average, the depreciation of the peso, the increase in producer price inflation and that the slowdown that we estimate for private consumption would be concentrated in services.

In this sense, with the data from recent fortnights we see an incipient change in the trend of annual inflation of goods that would continue slowly going forward," estimated Iván Arías , chief economist of the bank.

He also said that annual inflation in services began to fall below 5.0% in the last two weeks, but is still far from its average of 3.3% for the previous 10 years.

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“We expect the easing of pressures on the services component to consolidate in the coming months as labor market conditions begin to ease more significantly, offsetting the rise in annual merchandise inflation.”

It is worth noting that during this fortnight, foods such as tomatoes fell by up to 18%, cactus by 10%, but eggs increased by more than 5%, according to figures from Inegi .