Food inflation in Mexico, 14.6%; among the highest in the OECD

Mexico registered one of the 18 most pronounced food inflations among the members of the Organization for Economic Cooperation and Development (OECD) during September.

According to the entity, in the month of September 32 of the 39 member countries registered double-digit variations in food inflation; one of them was Mexico with an annual fluctuation of 14.6%.

In the ninth month of the year, OECD countries registered an average variation of food prices of 15.3%; therefore, that of Mexico was slightly below the average.

Among this group of countries with the highest food inflation, the leaders were Turkey, with an annual variation of 93%; Lithuania, which reached a variation of 31%, also at 12 months and Hungary, which reached a fluctuation of 30.7 percent.

Just on Wednesday, November 2, the president of the Federal Reserve, Jerome Powell, observed in a conference that he regrets the impact that households and companies are feeling due to the escalation in food, energy and housing prices.

According to OECD data, food inflation in the United States registered a variation of 12.9% in September, which is much more moderate than that observed in Mexico.

Information from the World Bank (WB) released at its annual meetings in September confirmed that low-income families spend up to 40% of their income on food purchases.

The same is true of low- and middle-income countries, the World Bank’s chief economist for Latin America, William Maloney, explained separately, noting that they are also the ones that are suffering the greatest impact from the global rise in prices.

Energy, with the least fluctuation

However, if the monthly comparison disclosed by the OECD is taken from energy prices, Mexico remains the country with the lowest annual variation, corresponding to 6.3% per year.

With this record, Mexico was far from the OECD average, which was 28.8% at twelve months.

Just in October, the deputy director of fiscal affairs of the International Monetary Fund (IMF), Paolo Mauro, explained to El Economista that the energy subsidies granted by Mexico, specifically gasoline, have led people to pay an artificially low price for the gasolines.

This has also been an inefficient way of helping low-income people.

Rating agencies such as Moody’s have this same perception. According to the agency’s sovereign analyst, Renzo Merino, the Mexican government has tried to help mitigate the impact of fluctuations in international energy prices from the extraordinary income left by this same variable.

However, he stressed that by using these extraordinary resources, he is missing an important opportunity to use them more efficiently.

Thus, in Mexico fiscal stimuli continue in terms of the Special Tax on Production and Services for gasoline consumers.

Triple digit in energy

According to the OECD comparison, there are 35 member countries of the 39 that registered double-digit annual inflation in energy in September.

Between them, the Netherlands and Turkey reached historical triple-digit fluctuations of 113.% and 146.5%, respectively.

The entity’s record shows that the average inflation of energy among the OECD countries had an annual variation of 28.8% in September, which completes a third monthly moderation since the peak reached in June, when it reached an average 40.7%.

In this comparison, the United States observed an annual fluctuation of 19.8%, which is also in its third consecutive month of slowdown.

The prices of some goods such as food have been impacted by logistical disruptions in the global production and distribution chains, World Bank experts point out.

ymorales@eleconomista.com.mx