Annual Inflation in Mexico in 2025
According to the National Institute of Statistics and Geography (Inegi), the annual inflation rate in Mexico for 2025 was 3.69%. However, the impact of this inflation wasn’t uniform across the country. In ten states, the price increase surpassed the national rate, and in seven of these, it exceeded the Banco de México (Banxico) target of 4%.
States with the Highest Inflation
Inegi’s data shows that inflation was higher than the national average in twelve states. Of these, seven surpassed 4%, leading to a more significant erosion of purchasing power for their residents.
- Mexico City
- State of Mexico
- Nuevo León
- Jalisco
- Veracruz
- Guanajuato
- Querétaro
- San Luis Potosí
- Sonora
- Colima
States with Lower Inflation
In contrast, some states experienced a pause in price increases, with inflation rates below 3%. Here are the top five states with the lowest inflation rates:
- Tlaxcala (2.19%)
- Baja California Sur (2.34%)
- Baja California (2.44%)
- Tabasco (2.62%)
- Sinaloa (2.75%)
Factors Influencing State-Level Inflation
Gabriela Siller, Chief Economist at Banco Base, explains that state-level inflation varies due to several factors. Economic growth is one such factor; higher growth puts more pressure on prices. Another factor is the import of goods, as industrial states have greater commercial activity than southern states. This means that the exchange rate factor has a relatively more significant impact on these types of entities.
Other factors include weather, which affects agricultural goods, remittances that generate more income in certain regions and thus higher demand, logistical costs derived from geographical location, and even security concerns.
Understanding Inflation
What is Inflation?
Inflation refers to the sustained and widespread increase in the prices of goods and services within an economy over a prolonged period. This phenomenon implies a decrease in the real value of money, meaning that over time, each monetary unit can purchase fewer goods and services, as per Banxico.
Why Does Inflation Matter?
Controlled inflation allows individuals to maintain their purchasing power while encouraging the production of goods. Both extremely low and high inflation rates are detrimental; a very low rate discourages merchants from offering their goods, while an excessively high rate reduces individuals’ purchasing power.
What is the Ideal Inflation Level?
The ideal inflation rate falls within Banxico’s range of 2% to 4%, according to México, ¿Cómo vamos?
Additional Impacts of Inflation
Rising prices not only affect the purchasing power of households but also reduce their possibilities for savings and investments, as more money is needed to cover basic expenses. Moreover, if you have money saved in an account that doesn’t generate returns, its value decreases over time.
Top 10 Products with the Highest Price Increases in 2025
- Chile serrano (64.40%)
- Tostado Coffee (27.58%)
- Other fresh chiles (27.47%)
- Green Tomato (25.91%)
- Soluble Coffee (23.99%)
- Beef Chuck and Ribs (19.30%)
- Beef Offal (19.27%)
- Leftover Beef (18.45%)
- Beef Sirloin (17.60%)
- Ground Beef (16.51%)
- Liquid Chocolate (14.48%)
- Lemon (13.70%)
- Special Beef Cuts (13.69%)
- Personal Hygiene Products (12.52%)
- Lettuce and Endive (12.27%)
Impact on Lower-Income Households
Gabriela Siller believes that lower-income households are most affected by inflation because, faced with rising prices, “they don’t have much left to turn to and are forced to either buy less, stop purchasing, or switch to cheaper alternatives.”
Cuauhtémoc Rivera, President of the National Alliance of Small Businesses (Anpec), agrees that there is a “precarization of family consumption,” where price remains the primary concern, particularly for lower-income groups.
“People consume based on price and are increasingly being forced away from their preferred brands and lifestyle due to affordability,” Rivera explained.
For instance, consumers are purchasing more bulk items like rice, sugar, and beans because acquiring them in larger quantities is more affordable.
