August 24, 2017 / 12:43 AM / a year ago

Mexico to introduce new inflation methodology in 2018

MEXICO CITY (Reuters) - Mexico will introduce a new inflation methodology in the second half of 2018 that will include measures from more cities and small towns as well as a greater range of products, the national statistics agency (INEGI) said on Wednesday.

FILE PHOTO - Sacks of different varieties of corn grain are displayed at a market in Mexico City, Mexico, May 19, 2017. REUTERS/Henry Romero/File Photo

The new system will provide readings for each of the country’s 32 states and it is based on International Monetary Fund best-practice recommendations, officials said.

It will kick in next August and will include measurements from towns of less than 15,000 people for the first time as well as gauging price changes over a wider basket of goods, INEGI director of statistics Arturo Blancas told reporters.

The new basket of measured items will increase from 283 items and services to 299, while the number of municipalities covered will grow from 46 to 55, Blancas said.

Some of the new products and services include pet grooming, soy milk and carpeting.

The methodology reflects new patterns of consumption in both goods and points of sale, such as convenience stores, said INEGI President Julio Santaella.

Mexican inflation has surged to an over eight-year high, but the central bank held borrowing costs steady this month for the first time in eight meetings and said there were signs that the spike in consumer prices is peaking.

This is the sixth time INEGI has tweaked its inflation formula since 1969 and the last change in weightings was in 2013.

Reporting by Sheky Espejo; editing by Diane Craft

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