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In January 2014, changes in Mexico's IVA (value added tax) were implemented that increased rates in the country's Border States from 11% to 16%. While much regional opposition to this change has come from the Border States, there has been little evidence to-date of impacts on consumers. Crossborder Group analyzed recent historic monthly consumer price index data from INEGI (the Índice Nacional de Precios al Consumidor - INPC) through January 2014 -- and found some surprising results comparing data from major non-border and border cities.
Notably, there does appear to be an unusual increase in Border State Cities' consumer price index in January 2014. It is unclear if this can be attributed entirely to the IVA increase - but additional future data will help to clarify this.
Also, another unexpected finding: odd peaks for Border State Cities consumer prices each November, and dips each May -- peaks potentially related to Mexico's November Buen Fin, as well as dips potentially related to some combination of Mother's Day sales on both sides of the border and US sales events related to Memorial Day.
Additional analysis is needed -- but Crossborder Group hopes this information may be useful for your Mexico and binational US-Mexico needs. Please feel free to contact us at Answers@CrossborderBusiness.com for questions or more information about our industry and market analysis services - or visit our website at www.CrossborderBusiness.com.