Economics: As inflation persists, expanded price controls loom as a threat

MEXICO - Report 27 Apr 2026 by Mauricio González and Francisco González

The overall inflation rate for the first half of April (4.53%) was virtually unchanged from March (4.55%), while core inflation declined by 0.17 percentage points, falling from 4.44% to 4.27%. Although both indicators show a modest reduction, it is worth highlighting that core inflation has been on an upward trend since the second half of May 2025 and remains above the Bank of Mexico's target. Non-core inflation, meanwhile, has surged dramatically, rising from 1.43% in the first half of January to 5.41%. Against this backdrop, a renewed risk has emerged: the potential extension of price controls to a broader range of products.

On April 17, the renewal of the Anti-Inflation and High Cost of Living Package (PACIC) was announced, fixing the price of a basic food basket at 910 pesos for the next six months for an average family of four. This could signal a further generalization of price controls across multiple goods, reproducing the historical distortions the country has experienced in the past, and ultimately imposing significantly higher costs on Mexican households.

Turning to the week's economic indicators, the Global Economic Activity Indicator (IGAE) posted a seasonally adjusted annual decline of -0.3% in February 2026, turning negative after the fourth quarter of 2025 had recorded an average upturn that stood in contrast to the stagnation observed throughout the year as a whole. The contraction was driven by a combination of sectors that have remained weak since 2025 and others whose magnitude of decline came as a surprise. In the first category, industry stood out with an annual drop of -1.4% for the month, led by manufacturing at -2.3%, while within services, the restaurants and hotels subsector fell -3.2%. More surprising was the year-to-date performance of professional, scientific, and technical services (-7.3%), entertainment services (-7.0%), and business support services (-2.1%), all of which had posted solid growth across several months of last year.

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