By: Enrique Peña Nieto
Today, the National
Institute of Statistics and Geography (INEGI) announced excellent news for
Mexican families: at the close of
2015, the inflation rate was only 2.13%. This is the lowest
inflation rate on record since it began to be measured 45 years ago.
Inflation directly affects families’ well-being, as
it measures the change in prices of a basket of goods and services representative
of Mexican household consumption. In other words, high inflation means that prices are rising significantly
and, therefore, families’ incomes have less purchasing power. Conversely, as is happening now, low inflation means
that prices for major products and services purchased by Mexican practically
are not increasing.
To gauge the importance of the good news today
announced today by the INEGI, it is worth remembering what inflation was like
in the past in Mexico. For example, three decades ago, in 1987, the annual inflation rate was
159.2%. This means that within a single year, the cost of living virtually tripled. If we look back 20 years, inflation reached 52% in
1995. And just a few years ago, in 2008, inflation was 6.5%: three times the current inflation rate of barely
Another way to appreciate the price stability in
Mexico today is by making an international comparison. According to the latest available data, Venezuela,
for example, has an inflation rate of 190%, Russia of15%, Argentina of over 14%
and Brazil of 10%. Colombia has an inflation rate of 6.8% and Peru of 4.1%.
In the case of Mexico, the low inflation reported
today by the INEGI reflects the success of the monetary policy independently defined
by the Bank of Mexico and the responsible management of public finances. It is also a result of the new economic conditions
of greater competition and lower rates, resulting from the structural reforms
we have achieved together.
Indeed, from December 2014 to December 2015, as a
result of Telecommunications Reform, the cost of fixed telephony fell by 4.2%; the cost of mobile telephony decreased by 16.8%; international long distance
charges were reduced by 40.7%, while national long distance charges dropped by
100% since they were eliminated. As a result of the Energy and Fiscal reforms, the cost of electricity
calculated by the INEGI fell by 3.7%, while the price of natural gas consumed
in households decreased by 10.9%.
In short, this historically low inflation, which
the INEGI has just announced, is the result of the macroeconomic stability our
country has been consolidating for two decades, and the structural reforms of
the past three years, whose effects are already being positively reflected in
the economy of Mexican families.