Inflation under control, but eating and living are becoming more expensive.

Last July, annual inflation was 3.5%, the lowest level since 2020. This is good news, but for millions of Mexicans, the reality is different: what matters isn't average prices, but how much it costs to eat and live.

Yesterday, August 11, INEGI presented its Poverty Line Indicator (PL) for the first time, corresponding to July 2025. Until March of this year, these measurements were conducted by the National Council for the Evaluation of Social Development Policy (CONEVAL), created in 2004 to measure poverty and evaluate social programs. It was dissolved by Congress on July 17, arguing that it was intended to "avoid duplication" and "optimize resources." INEGI thus adopted the monthly calculation using the same methodology, but without evaluating public policies.

The PL determines whether a person's income covers both food and non-food needs (housing, transportation, education, health, clothing), setting a monetary threshold to measure income poverty. When it only includes food, it is called the Extreme Income Poverty Line (EIPL); if it combines both, it is the Income Poverty Line (IPL).

That month, the LPEI (Income and Earned Income) was 1,856.91 pesos in rural areas and 2,453.34 in urban areas. In one year, it increased 2.9% in rural areas and 4.3% in cities. The LPI (Income and Earned Income) reached 3,396.71 pesos in rural areas and 4,718.55 in urban areas, 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 rural areas to cover the same basic standard of living.

In the urban basket, meals eaten out rose 7.8% and accounted for more than half of the increase. But eating at home was also more expensive: beef steak increased 18% and pasteurized milk 8.3%. In rural areas, the pattern was similar, with ground beef being the most common product after meals eaten out.

For families, this means that a larger portion of their budget is spent on food, transportation, housing, and education, reducing the margin for savings or healthcare.

In this context, social programs from the federal and state governments are a buffer, but insufficient. According to the 2024 National Household Income and Expenditure Survey (ENIGH) conducted by INEGI (National Institute of Statistics and Census), in the poorest households, support represents an average of 17.3% of total income; in the second decile, 9.4%; and in the richest, just 0.8%. Transfers—resources that households receive without giving any good or service in return, from scholarships and pensions to remittances or donations—constitute 42% to 44% of transferred income in the poorest households. Although 82% of families receive some social support, this does not offset the sustained rise in the cost of the basic food basket.

Nearly 36% of the population lives in poverty and is vulnerable to any increase in food and services, as their spending capacity is minimal. Although most receive some form 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, current political and economic conditions both within and outside the country make this unlikely to happen in the short term.

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