Mexico Inflation May 2022


Mexico: Inflation is stable in May

June 8, 2022

Consumer prices increased 0.18% in May over the previous month, which was below April's 0.54% increase. May's result marked the softest rise in prices since November 2020. The slowdown was primarily driven by a slower increase in prices for food, beverages and tobacco. In addition, price pressures for housing dropped at a faster pace. Moreover, price pressures for transport eased.

Inflation came in at 7.7% in May, unchanged from April’s reading but well above the Central Bank’s 2.0%–4.0% target range and above market expectations. Annual average inflation rose to 6.8% in May (April: 6.6%). Finally, core inflation rose to 7.3% in May, from the previous month's 7.2%.

In early May, the government announced measures to contain inflation, which include a six-month agreement with the private sector to contain prices for 24 key foodstuffs, a plan to boost grain production and the temporary removal of tariffs on basic imports. Together with higher interest rates, the impact is likely to be a modest reduction in headline inflation by year-end.

On the implications of May’s inflation data for monetary policy, Goldman Sachs’ Alberto Ramos said:

“Overall, the high May core inflation print, highly disseminated price pressures [and] deteriorating inflation expectations […] would be consistent with a 75bp rate hike at the June 23 MPC meeting.”

Panelists surveyed by FocusEconomics see inflation ending 2022 at 6.5%, which is up 0.9 percentage points from last month’s forecast. For 2023, the panel sees year-end inflation at 4.2%.


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Mexico Inflation Chart

Mexico Inflation May 2022

Note: Month-on-month and year-on-year changes of consumer price index (CPI) in %.
Source: Mexico National Statistics Institute (INEGI) and FocusEconomics calculations.

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