**Increase in LP Gas Prices Impacts Regional Economy: Expert**
The recent spike in LP gas prices is delivering a significant blow to the regional economy, impacting not just individuals but also businesses reliant on this energy source. According to economist Jorge Fonseca, the increase in LP gas cost can lead to a rise in the prices of other essential consumer goods.
For the week of August 4th to 10th, the price per kilogram of LP gas will be 19.57 pesos, markedly higher than the 17.99 pesos recorded in January of this year. To put this in perspective, in August 2023, the price stood at 16.29 pesos per kilogram.
Jorge Fonseca highlighted that the price increase is particularly severe in Baja California, where LP gas prices are the highest in Mexico. The cost rise, exceeding 20%, has further strained the financial situation of consumers, especially those with lower incomes. It’s not just households feeling the pinch—businesses that depend on LP gas, such as bakeries, restaurants, and tortilla shops, are also suffering.
Fonseca emphasized that the increase in LP gas prices is occurring against a backdrop of persistent inflation, which has remained above the targets set by the Bank of Mexico (Banxico). For over 40 months, inflation has exceeded Banxico’s 3% goal, reaching 5.61% in the first half of July 2024 on an annual basis.
The ongoing inflation coupled with surging LP gas prices suggests challenging times ahead for both consumers and businesses in the region.
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**Secondary Article: Rising Inflation and Its Widespread Effects**
Recent reports indicate that inflation in Mexico continues to challenge the economy, significantly affecting consumer purchasing power. According to experts, core inflation rose to 6.1% on a yearly basis by July 2024. This sustained increase in consumer prices is restricting economic growth and impacting various industries.
The National Institute of Statistics and Geography (INEGI) points out that the prices of basic commodities such as food, electricity, and transport have seen substantial hikes. As a result, the Bank of Mexico is contemplating further tightening its monetary policy to curb inflation by potentially increasing interest rates.
Moreover, the economic strain is also affecting employment rates. Small and medium-sized enterprises (SMEs), which form the backbone of Mexico’s economy, are finding it increasingly difficult to cope with higher operating costs. The situation necessitates immediate attention from policymakers to devise strategies that can stabilize prices without stifling economic activity.
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