Introduction
The southern region of Mexico has witnessed a significant decrease in extreme poverty due to income growth and improved distribution, according to the Banco de México’s (Banxico) Regional Economies Report for the third quarter of 2025.
Regional Overview
The southern region comprises the states of Campeche, Chiapas, Guerrero, Oaxaca, Quintana Roo, Tabasco, Veracruz, and Yucatán. Historically, this area has had the highest poverty levels in Mexico, and despite recent progress, it still faces substantial socioeconomic challenges.
Banxico’s Measurement of Poverty Reduction
Banxico assessed the reduction in extreme poverty due to income using three factors: real income growth, which reflects improvements in average household income; the distribution effect, capturing whether lower-income households improved their situation more than others; and the price relative effect, evaluating the impact of rising food prices using data from the National Institute of Statistics and Geography (Inegi).
Key Factors Contributing to Poverty Reduction
The 9.5 percentage point decrease in the south is primarily due to real income growth for households, contributing 8.3 percentage points to poverty reduction, indicating increased purchasing power for families.
Additionally, better income distribution benefited lower-income households more significantly, adding 5.5 percentage points to the reduction. Together, these factors accounted for a 13.8 percentage point improvement, offsetting the adverse effect of rising food prices, which would have increased poverty by 3.9 percentage points alone.
Investment and Infrastructure
The southern region experienced substantial public works investments, including the Olmeca Refinery, the Mayan Train, the Interoceanic Corridor, and complementary projects. These investments likely played a role in the region’s success.
National Trends and Challenges
Nationally, extreme poverty due to income dropped from 14.0% in 2018 to 9.3% in 2024, according to Consejo Nacional de Evaluación de la Política de Desarrollo Social (Coneval) and Inegi data.
Despite the negative impact of the COVID-19 pandemic on household incomes in 2020 and significant increases in food basket costs exceeding the National Consumer Price Index (INPC) during the same period, poverty reduction still occurred.
Across all regions, the decrease in extreme poverty due to income was driven by increased current household income, mainly through labor income evolution and higher transfer flows, which favored lower-income households more.
Persistent Structural Challenges
Although the southern region performed best over the six-year period, it still has the highest absolute levels of extreme poverty among regions. Efforts must continue to promote “more balanced and inclusive regional development capable of expanding income generation opportunities for all households,” as stated in the report.
In 2018, the central region (Ciudad de México, Estado de México, Guanajuato, Hidalgo, Morelos, Puebla, Querétaro, and Tlaxcala) had a high level of extreme poverty due to income at 11.1%, which decreased to 7.6% during the period.
The central north region (Aguascalientes, Baja California Sur, Colima, Durango, Jalisco, Michoacán) reduced extreme poverty due to income from 9.3% to 6.5%.
Meanwhile, the northern region (Baja California, Chihuahua, Coahuila, Nuevo León, Sonora, and Tamaulipas), already having the lowest incidence in 2018 at 6.6%, further decreased it to 3.2% in 2024, maintaining its position as the region with the best conditions.
Key Questions and Answers
- What is the southern region of Mexico? The southern region comprises the states of Campeche, Chiapas, Guerrero, Oaxaca, Quintana Roo, Tabasco, Veracruz, and Yucatán.
- What factors contributed to the reduction in extreme poverty in the southern region? The primary factors were real income growth for households (8.3 percentage points) and better income distribution benefiting lower-income households (5.5 percentage points), offsetting the adverse effect of rising food prices.
- What investments were made in the southern region? The southern region experienced substantial public works investments, including the Olmeca Refinery, the Mayan Train, the Interoceanic Corridor, and complementary projects.
- What is the current level of extreme poverty due to income in Mexico? Extreme poverty due to income dropped from 14.0% in 2018 to 9.3% in 2024 nationally.
- What challenges does the southern region still face? Despite progress, the southern region continues to have the highest absolute levels of extreme poverty among regions, requiring ongoing efforts for balanced and inclusive development.
