Overview of Inflation Trends in Mexico
According to a report by the National Institute of Statistics and Geography (Inegi), Mexico’s consumer inflation began to accelerate at the start of 2026. In the first half of January, the National Consumer Price Index (INPC) showed a quinzenal advance of 0.31%, placing annual inflation at 3.77%.
Inflation Acceleration and Comparison
This acceleration follows the previous quinza’s 3.66%, recorded at the end of 2025, but remains within the Banco de México (Banxico) target range of 3% ±1 percentage point.
Market expectations had anticipated a more significant inflation acceleration at the beginning of 2026, with Reuters’ survey projecting a 3.86% increase for January’s price rise.
The new year brought not only a salary minimum increase but also an update to the IEPS (Excise Tax) on certain products, such as soft drinks and tobacco, causing their prices to rise.
Inflation has stayed within the central bank’s range since mid-July of the previous year, and it is expected to remain so throughout 2026. However, analysts have warned of persistent inflationary risks that could push inflation higher.
Market consensus, as per the Citi Encuesta de Expectativas, suggests that inflation will reach 4% by year-end, while the Instituto Mexicano de Ejecutivos de Finanzas (IMEF) predicts a 3.95% figure.
In this context, the central bank is expected to maintain its reference rate unchanged in its upcoming monetary policy meeting, scheduled for February.
Inflation Components and Their Impact
The Inegi report highlights that, during the first half of 2026, service and merchandise prices exerted greater pressure on inflation, being components of the underlying inflation, which excludes more volatile goods and services.
The underlying inflation stood at 4.47% in the first half of January, driven by a 4.51% increase in merchandise (including food and tobacco) and a 4.44% rise in services.
Annual inflation rose by 1.43% for non-underlying components.
Among these, agricultural product prices increased by 1.39%, while energy and government-authorized tariffs rose by 1.47%.
Key Price Changes Affecting Consumers
The start of the new year brought higher prices for several products, as measured by quinzenal changes and their impact on consumers:
- Cigarettes: 12.22%
- Bottled soft drinks: 3.97%
- Street food vendors (loncherías, fondas, torterías, taquerías): 0.75%
- Owner-occupied housing: 0.18%
- Tomatoes: 3.45%
- Electricity: 0.99%
- Restaurants and similar: 0.49%
- Lemons: 15.21%
- Domestic help: 1.28%
- Hair care products: 1.75%
Meanwhile, these products experienced price reductions, offering some relief to consumers:
- Air transport: -27.30%
- Eggs: -3.95%
- Residential LP gas: -1.83%
- Taxis: -1.57%
- Packaged tourism services: -7.52%
- Serrano chili peppers: -10.56%
- Detergents: -0.81%
- Lettuce and iceberg lettuce: -5.97%
- Onions: -3.29%
- Other vegetables and legumes: -2.61%
