Mexico’s annual inflation rate accelerated to 3.62% in the first half of October as the expiration of seasonal electricity subsidies lifted utility bills and pushed up food and travel costs, keeping pressure on the central bank’s policy path.
Mexico inflation rises to 3.62% as power subsidies end
The reading from the national statistics agency, INEGI, was slightly below the 3.63% rate recorded a year earlier, but the 0.41% quincenal increase was sharper than in the same period of 2025 and came with a clear shift in the inflation mix. Electricity climbed 18.51% from the prior two weeks after the summer tariff program ended in 18 cities, while green tomatoes jumped 22.07% and airfares rose 14.77%.
For investors, the key issue is not just the headline number but the composition. Core inflation, which strips out more volatile items, rose 0.25% on the period and 3.78% from a year earlier, showing underlying price pressure remains sticky even as the broader index was helped by declines in some fruits and vegetables. That matters for Banco de Mexico, which has been balancing slower growth against a still-elevated price backdrop.
The non-core index rose 0.98% in the half-month, with energy and government-authorized tariffs up 1.85%, while agricultural prices fell 0.11%. The end of the summer electricity subsidy hit households in places including Monterrey, Mérida, Cancún and Villahermosa, underscoring how seasonal policy support can distort monthly price trends and complicate the inflation outlook.
Regional data showed the pressure was uneven, with Tabasco posting the biggest quincenal increase in the country at 2.13%, followed by Yucatán and Quintana Roo. The basket of minimum consumption goods also rose 0.40% on the period, suggesting lower-income households continue to face meaningful cost-of-living strain.
The October print keeps inflation close to the middle of Banco de Mexico’s target band, but the rise in core prices and the rebound in regulated energy costs leave little room for complacency. Traders will now watch for any shift in the bank’s tone at upcoming policy meetings and whether fresh price pressures broaden beyond seasonal utilities and food.
| Entity | Gains | Losses |
|---|---|---|
| Electricity producers/utilities | ▲Higher tariffs | ▼Subsidized demand |
| Mexican households | ▲Lower fruit prices | ▼Higher power bills |
| Banco de Mexico | ▲Clearer inflation data | ▼Less room to ease rates |
| Inflation-sensitive borrowers | ▲Softer headline vs. target band | ▼Sticky core prices |
