Mejía recalled that the behavior of livestock is not similar to that of other foods. While cycles for fruits and vegetables are short and highly volatile, those for beef, pork and chicken last longer and take longer to unwind, which has created longer-lasting pressures on core inflation.
This effect is not only observed in merchandise sensitive to these inputs – such as sausages and processed foods – but also in the formation of prices in the service sector, explained the deputy governor during the 2025 Economic Forum of the Pan American University.
It is worth remembering, that meat prices have already increased more than 18.5%according to data from the National Institute of Statistics and Geography (INEGI), compared to the prices observed last year. In part, the increase is due to the screwworm infestation. This and other health problems also directly or indirectly affect the prices of pork, chicken and eggs.
The difference between inns and restaurants
Mejía explained that restaurants and formal establishments already show similar patterns to those before the pandemic, but that the true focus of persistence is in loncherías, fondas, torterías and taquerias, businesses whose cost structure depends directly on livestock inputs and that have much less room to adjust their menus or absorb increases.
“If they do not pass on the increases, they stop being profitable,” said the deputy governor, underscoring why this segment is the one that has contributed the most to underlying inflation remaining above 4%.
To measure the problem, while inflation in services remains around 4.4%, food-related services exceeded an annual increase of 7.5%, until October of this year.
However, the official pointed out that the livestock cycle shows signs of stabilization, which should be reflected in a gradual moderation of pressures on food services in the coming months. Banxico’s expectation is that this component stops being an obstacle to inflationary convergence as the costs of meat and its derivatives normalize.
Other fronts for inflation
This does not mean that the outlook is resolved, Banxico adjusted its underlying inflation forecast upwards, precisely because of the resistance that both food merchandise and food-related services have shown; However, Mejía emphasized that the monetary stance still has room to continue adjusting.
He noted that the real ex post rate (the interest rate that discounts the inflation that actually occurred and that reflects real purchasing power) is within the estimated range of neutrality and, under that calculation, there would still be room for additional cuts, although in a prudent and calibrated manner.
Alejandro Saldaña, chief economist at Banco Ve por Más, explained that convergence to the Bank of Mexico’s objective will take longer to arrive, due to tariffs, despite the fact that it is a one-time supply shock. And not only that, he also noted that changes in labor costs maintain pressure on prices, while there are no major changes in productivity.
“There is a paradigm shift in Mexico, which is going to affect inflation and the economy in general, which is a labor market, a new order in the labor market. Our population is aging… this is making the labor factor more expensive. Also coupled with the minimum wage policies that have been quite aggressive… as a factor of potential generation of inflation in the medium term,” said Saldaña, in a panel of experts within the same event.
On the other hand, Jannet Quiroz, director of Economic Analysis at Monex, explained that “an important risk will have to do with what is approved in terms of the tariffs that Mexico could be imposing on those countries with which it has not signed a trade agreement… this could generate, I believe, a more permanent impact at least for all of 2026 for inflation.”
In October, the general consumer price index moderated to 3.57% at an annual rate, after two months of rising. Core inflation, for its part, stood at 4.28%, unchanged compared to September.
