Mexico CPI (May) Temporary relief

Research evidence excerpt

Mexico CPI (May) Temporary relief

Economics ● Mexico

9 June 2026

Implications

May CPI came out lower than expected due to a large downside surprise in the non-core component and a relatively well-behaved

core category. The former was the main reason behind today’s surprise, as non-core prices subtracted 0.38pp from the overall CPI.

This occurred due to the seasonal reduction of electricity prices in some states of the country (i.e. occurs in April and May of every

year) and to the steep decline of fresh food prices. So, this combination is what explains why the non-core component had such a

large decline.

In fact, the top ten prices that removed the most pressure from the overall CPI during this month belong to the non-core category,

which reflects an unusual and unsustainable performance. We think some fresh food prices will remain volatile, with room to bounce

later in the year. It is key to note that from July to December 2025, the non-core category posted a below-2% annual rate, mainly

helped by fresh food prices. This atypically low comparison base will likely prompt a bounce in H2 2026. Moreover, weather

conditions could be challenging for some crops due to El Niño effect this year. And, while in the case of Mexico it is hard to assess

the overall impact, this could add to the volatile performance that primary activities are already reflecting. In other words, we think

that the strong anchor of some key non-core prices that stood out in May and could continue in June will likely reverse in H2 2026,

leading to higher inflation prints. With respect to energy prices, they could remain steadier, given the government’s policy to keep

some of those broadly unchanged. However, the price stimulus for high-octane gasoline and diesel was reduced or removed in June,