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Mexico Reports Falling Prices in May, Slowing Yearly Inflation
 Xinhua
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June 11, 2010
Mexico's retail prices fell by 0.63 percent in May from April, the steepest monthly drop on record, according to data published by the Bank of Mexico this week.
The drop was due in part to cuts in state-controlled electricity prices, which are always slashed ahead of northern Mexico's summer, the peak periods for residents' energy consumption to cool homes and workplaces.
The hottest Mexican cities, all in the north, are experiencing temperatures of around 45 degrees Celsius, more than 15 degrees higher than Mexico City, said the National Meteorology Service Wednesday.
The inflation rate dropped slightly due to falling fruit and vegetable prices. Onion prices fell by close to 45 percent, while tomato prices fell by more than 18 percent and potato prices by close to 9 percent, according to the Bank of Mexico.
Underlying inflation rate, which excludes more volatile elements like food and state-controlled prices, was at 4.1 percent, down modestly from April's 4.11 percent.
Mexico's inflation spiked in the first three months of the year, following higher taxes and fuel prices from Jan. 1. A stronger peso during the first few months helped to bring inflation down by reducing the prices of imported goods including raw ingredients for staple foods.
However, during April and May, Mexico's pesos experienced a sharp decline alongside all emerging market currencies, as Greece's debt problems spooked all cross-border investors.
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