Mexico's annual inflation rate skyrocketed to a 16-year high in 2017, according to a new report by the National Statistics and Geography Institute, INEGI, which said that it reached a whopping 6.77 percent.
The organization also showed that last year's rate was the highest since May 2001, when it reached 6.95 percent, Xinhua reported.
The National Consumer Price Index, INPC, calculated a 0.59 increase by December, influenced by a 42.91-percent bump in the cost of tomatoes, a 22.69-percent jump in air fares as well as a 7.43-percent rise in services related to the tourism industry. Increases in other sectors were noted by the index.
Meanwhile, the core inflation index rose by 0.42 percent in December as well, marking the largest growth since April. On the other hand, last year's annual core inflation index stood at 4.87 percent, Xinhua reported.
Gabriela Siller, director of economic analysis at Banco Base, noted that the core index exceeding four percent was attributed to the volatility of the Mexican peso last year.
The Ve por Mas Bank, known as BX+, said that after the release of the INEGI figures, Banco de Mexico, Banxico and Mexico's Central Bank may opt to raise the benchmark interest rate by 25 basis points next month.
A benchmark rate rise from seven percent to 7.25 percent was already implemented by Banxico last December.
Uncertainty surrounding the renegotiation of the North American Free Trade Agreement, NAFTA, by Mexico, Canada and the United States has also depreciated the Mexican peso, which was already suffering from “high volatility.”
Mexico's economic woes comes amid an election year, which has seen center-left nationalist and former Mexico City Mayor Andres Lopez Obrador, simply known as AMLO, top several 2018 presidential polls.