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Tapatio families feel the pinch despite low inflation

January 14, 2013

Notwithstanding last year’s low inflation rate, research carried out by the University of Guadalajara (UdeG) shows six out of every ten Tapatio families make only 40 percent of what they need to cover their basic living costs.

According to the UdeG, 60 percent of local families make less than 5,800 pesos a month (equivalent to three minimum wages). This is not even enough to cover the basic “canasta” (basket) of food and essential supplies for a family of four, which has risen 188 pesos in the last two months to 6,570 pesos a month.

Factor in basic expenses such as housing, transportation, clothing and education, and the average family needs an income of at least 15,000 pesos a month, eight times the minimum wage. This means those families that earn under three minimum wages face a monthly income deficit of at least 9,200 pesos.

The good news is that Mexico’s annual inflation rate was just 3.57 percent in 2012, according to the National Institute of Statistics and Geography (INEGI). Inflation remained lower than the target of four percent, mainly due to the reduced cost of making cell phone calls, which dropped by a massive 46 percent last year.

Core inflation, which ignores the price of agricultural goods which change frequently, or government-determined rates such as electricity, rose by just 2.9 percent in 2012, the lowest increase in Mexico since records began in 1983.

In contrast, non-core inflation, which only considers agricultural products and prices and rates set by the government, recorded an annual increase of 5.74 percent, largely because of last year’s avian flu outbreak in Jalisco which caused chicken and egg prices to skyrocket by over 12 percent.

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