Inflation in Mexico more than doubled to 1.09 per cent in January as residents were hit with growing government taxes and fees.
Sales tax rose countrywide from 15 to 16 per cent at the beginning of the year, increasing the cost of some foods, beer and cigarettes. At the same time cash-strapped municipalities have been raising the cost of public transportation and telephone calls.
The jump in inflation was no surprise for analysts surveyed by Reuters who were expecting it to jump to 1.02 per cent in January from 0.41 per cent in December.
The increase drove up annual inflation to 4.46 per cent for the 12-months ending in January, compared to 3.57 per cent for the 12-months ending in December.
While the increases – especially those on basic goods and services – are likely to cause residents pain, there’s no obvious reason to believe these increases, which are unlikely to reoccur every month, pose a particularly scary inflation picture for the country. Even now, annual inflation isn’t particularly high, even by recent historical standards. (See the Bank of Mexico’s graph of the levels of annual inflation over the past three years.)
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