Last July, annual inflation was 3.5%, the lowest level since 2020. It is good news, but for millions of Mexicans the reality is different: what matters is not the average price, but how much it costs to eat and live.
Yesterday, August 11, INEGI first presented its indicator on poverty lines (LP), corresponding to July 2025. Until March of this year, these measurements were made by the National Council for the Evaluation of the Social Development Policy (Coneval), created in 2004 to measure poverty and evaluate social programs, and extinguished by Congress on July 17 with the argument of “avoiding duplicities” and “optimizing resources”. Thus, INEGI assumed the monthly calculation with the same methodology, but without evaluating public policies.
The LP determines whether a person’s income is enough for the food and non -food basket (housing, transport, education, health, dress), setting a monetary threshold to measure income poverty. When it only includes food is called extreme poverty for income (LPEI); If it adds both, it is the income poverty line (LPI).
In that month, the LPEI was 1,856.91 pesos in rural areas and 2,453.34 in urban. In a year it increased 2.9% in the countryside and 4.3% in the city. The LPI reached 3,396.71 pesos in rural areas and 4,718.55 in urban ones, with increases of 3.1% and 3.6%. According to the LPI, living in the city costs 1,322 pesos more per month than in the rural environment to cover the same basic level of life.
In the urban basket, meals away from home rose 7.8% and explained more than half of the increase. But also eating at home was more expensive: the res steak increased 18% and pasteurized milk 8.3 percent. In the field, the pattern was similar, with ground beef as a product of greater incidence after meals outside the home.
For families, this means that a most of their budget is used for food, transport, housing and education, reducing the margin for savings or health.
In this context, the social programs of the federal and state governments are a shock absorber, but insufficient. According to the National Income and Expenses Survey 2024 (ENIGH) of INEGI, in the poorest households the support represent on average 17.3% of the total income; in the second decil, 9.4%, and in the richest barely 0.8%. Transfers – resources that households receive without giving in return a good or service, from scholarships and pensions to remittances or donations – constitute 42 to 44% of the income transferred in the poorest households. Although 82% of families receive some social support, this does not compensate for sustained increase in the cost of the basic basket.
About 36% of the population lives in poverty and is vulnerable to any increase in food and services, since their expenditure margin is minimal. Although most receive some kind of social support, these resources only cover a fraction of the sustained increase in the cost of living.
Only an increase in better paid formal employment and broader social support could reverse poverty. Unfortunately, the current political and economic conditions inside and outside the country make it unlikely that this happens in the short term.
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