The cost of living in the fifth month of the year stood at 0.47% in the North American country

The price of living in Mexico and Brazil fell in May

photo_camera REUTERS/CARLOS JASSO - Vendors at the Central de Abastos in Mexico City.

Inflation in Brazil and Mexico fell in May compared to the previous month. Inflation in the Aztec country currently stands at 0.47%, which represents a drop of 11.73% on average over the last 12 months, according to the Brazilian statistics institute IBGE.

During April, prices rose by 1.06%, the highest inflation levels for this period in the last 26 years. The annual inflation rate then stood at 12.13%, the highest rate since October 2003.

For its part, Mexico recorded inflation of 0.18%, which represents an annual rate of 7.65%, caused by the increase in the production costs of agricultural and energy products, according to the National Institute of Statistics (Inegi).

The inflation figure recorded during this month of May is lower than the 0.20% of the same month in 2021, when INEGI reported an annual accumulated rate of 5.89%. During the previous month, 12-month inflation was 7.68%, the highest rate since January 2001

REUTERS/CARLOS JASSO - Central de Abastos, uno de los complejos de mercados mayoristas más grandes del mundo en la Ciudad de México, México
Inflation in Brazil rises to 12.3% annually

The increases in inflation levels in April were caused by price increases in 8 of the 9 sectors analysed by the statistics institute. The biggest price rises were recorded in the food and beverage sector (2.06%) and transport (1.91%). The sum of both sectors accounted for around 80% of the CPI last April.

Upward movements were also recorded in personal care and health products and services, which increased by 1.7%, and household goods, whose prices have changed by 1.5 %. The only sector where prices decreased was housing, where prices fell by $1.14. The rest of the groups averaged between 0.06% in education and textiles, where consumer prices rose by 1.26%.

Another element that has caused the sharp rise in prices has been the cost of energy, the price of petrol has increased by 2.48% and is responsible for the 0.17 point increase in the inflationary index.

"Gasoline is the product with the highest weight in the Broad Consumer Price Index (6.71% of the total), but other fuels also rose. Ethanol rose 8.44%, diesel 4.74% and gas for vehicles 0.24%," said André Almeida, coordinator of IBGE's inflation studies.

AFP/EITAN ABRAMOVICH  -   Gasolinera en Buenos Aires, Argentina
Inflation gives way in Mexico

The rise in prices has broken its upward trend and the Mexican CPI has reached its lowest level since the first half of March. In the Aztec country, the prices of agricultural products rose by 0.78% and energy and tariffs authorised by López Obrador's government fell by 2.47% due to adjustments in electricity tariffs within the framework of a warm season in the country.

The Bank of Mexico has set an inflation target of about 3%, which is plus or minus one percentage point. Over the past year it has consistently raised its benchmark interest rate from mid-2021 to its current level of 7% as the government grapples with high consumer prices.

As a way to control inflation, bank officials last week dropped the possibility of adopting a more significant hike in its rate, higher than those made since it began a tightening cycle of 50 basis points, with the aim of containing high inflation levels.

America Coordinator: José Antonio Sierra.