Mexico Inflation Calculator

This calculator helps you determine the inflation-adjusted value of money in Mexico over time. It allows you to visually compare the purchasing power of the Mexican Peso across different historical periods to understand how the cost of living has changed.

CPI and Inflation

The "Basket of Goods" Analogy

To understand the Consumer Price Index (CPI), or *Índice Nacional de Precios al Consumidor* (INPC) in local context, suppose you go to the grocery store to buy a specific "basket" of goods: staples like tortillas, beans, eggs, and housing costs. If you buy this exact same basket every month, you will notice the total receipt price changes over time.

National statistical agencies track the prices of a fixed basket of goods and services across the country. The CPI is the index number that represents the total cost of this basket.

Defining Inflation

Inflation is the rate at which the general level of prices for goods and services is rising. As inflation rises, every peso you own buys a smaller percentage of a good or service. Essentially, inflation is the decline of purchasing power over time.

Inflation Rate(YoY)

The Year-over-Year (YoY) inflation rate measures how much prices have changed compared to the same month in the previous year. It is calculated by comparing the CPI of the current month to the CPI of the same month one year ago.

The math behind it is: $\text{Inflation Rate (YoY)} = \frac{CPI_{current} - CPI_{previous\ year}}{CPI_{previous\ year}} \times 100\%$

Where:

• $CPI_{current}$ is the Consumer Price Index for the current month.
• $CPI_{previous\ year}$ is the Consumer Price Index for the same month in the previous year.

Key Concepts to Know

• Purchasing Power: This refers to the quantity of goods or services that one unit of money can buy. Inflation erodes purchasing power.
• Deflation: This is the opposite of inflation. It occurs when the general price levels decline, making money worth *more* over time.
• Data Source: This calculator uses data aligned with OECD standards for comparable international analysis.

Original CPI Data Table

You can refer to the original CPI data table below for detailed monthly CPI values used in the calculations. You can search for specific months to see the accurate CPI values.

FAQ

How we calculate the inflation-adjusted value?

To calculate how much a specific amount of money from a past year would be worth in a different year, we use the ratio of the CPI values from those two periods.

The formula for the Inflation-Adjusted Value is:

• $\text{Value}_{base}$: The original peso amount you want to convert.
• $CPI_{base}$: The CPI index value for the starting month/year.
• $CPI_{target}$: The CPI index value for the ending month/year.

For example, if the CPI today is twice as high as it was in a past year, the adjusted value of a peso from that year would be two pesos today.

Why the yearly average inflation rate may differ from official reports?

The yearly average inflation rate calculated using monthly CPI data may differ slightly from official annual inflation rates reported by sources like INEGI. This discrepancy can arise due to several factors:

1. Methodology: Official reports might use different weighting or averaging methods. Our approach uses simple averages of available monthly data.
2. Rounding: Different rounding practices can lead to slight variations.
3. Adjustments: Official figures often include seasonal adjustments or specific inclusion criteria that raw monthly indices might treat differently.

Tips for interpreting results

• When the adjusted amount is higher: If the result is higher than your original amount, the purchasing power of the peso has decreased. For example, if $100 in 2000 is equivalent to $250 today, it means prices have risen, and you now need $250 to buy what $100 bought previously.
• When the adjusted amount is lower: If the result is lower than the original amount, the purchasing power has increased due to deflation (rare in recent history).
• Long-term perspective: Mexico has experienced varying periods of inflation. It is crucial to factor in these changes when planning for long-term investments or understanding historical property values.

Data source

The data used in this calculator is the Consumer Price Index (CPI) for Mexico, sourced from the Organisation for Economic Co-operation and Development (OECD).

• Update Frequency: We periodically update this data to ensure the most recent economic conditions are reflected.
• Consistency: Using OECD data allows for standardized comparisons across different countries.