Mexico's inflation falls to 3.94% in May, hitting central bank's target

Mexico’s annual inflation rate dropped to 3.94% in May 2026, returning to the Bank of Mexico’s target range for the first time since January. The decline was sharper than analysts had predicted, with government measures playing a key role. The National Consumer Price Index (INPC) recorded a 0.21% monthly fall in May. Non-core inflation decreased by 1.65%, largely due to lower energy prices and electricity subsidies. These factors contributed to the broader slowdown in price growth.

Some food items saw significant price shifts. Potatoes and other tubers rose sharply by 12.68%, defying efforts to stabilise costs. However, green tomatoes, serrano peppers, and other fresh chillies became notably cheaper. Tomato prices also fell, dropping out of the top 10 products with the steepest monthly increases, averaging 48.89 pesos per kilogram.

Other essential goods followed the downward trend. Eggs, limes, bananas, onions, cucumbers, and electricity all recorded price reductions during the month. Federal initiatives, including the Anti-Inflation and Price Stability Pact (Pacic), helped temper broader price pressures. The inflation rate now sits at 3.94%, below the 4.03% forecast. This marks a significant easing, bringing stability to consumer prices. The decline reflects both policy efforts and market adjustments in key sectors.