Lower prices for electricity, eggs and tomatoes drove the inflation rate to its lowest level since the National Institute of Statistics and Geography began keeping records in 1970.
The institute’s monthly report pegged the rate at 2.88%, down from 3.06% in April, as consumer prices dropped 0.5%. Bank of Mexico, the central bank, has targeted 3% as its objective but has never achieved it for a full year.
Electricity prices were down 23%, eggs by 12% and tomatoes by almost 13%.
The Bank of Mexico continues to maintain its key interest rate at 3%, also a record low, and forecasts that inflation will remain below that figure for the rest of the year. Mexico has the lowest inflation rate of any major Latin American economy, according to Bloomberg.
Keeping inflation down has been a priority for almost 15 years, following more than two decades in which it averaged 39%.
“People in the 80s and 90s cited cost of living increases as the biggest problem and that led to a strong consensus in favor of lowering inflation,” Sergio Luna, chief economist at Citigroup Inc.’s Mexico unit, told Bloomberg. “When you combine that with institutional changes such as central bank autonomy, its rising credibility and its shift to inflation targeting, this is the result you end up with.”