Traditionally, inflation in Mexico tends to spike in January.
This phenomenon is often referred to as the “cuesta de enero,” the name given to price increases that occur at the beginning of each year that affect the purchasing power of consumers.
Mexico ended 2023 with annual inflation of 4.66 percent, down from 7.82 percent in 2022. The figure was within the expectations of the central bank (Banxico), although December 2023 saw a slight uptick in consumer prices that will probably continue through January, as new year food and energy price hikes kick in.
Banxico estimates that the Mexican economy will grow between 2.3 and 3.7 percent in 2024. Economists say this will be driven by strong consumption, remittances, and a favorable investment environment.. Thanks to a 20-percent increase in the minimum wage that took effect January 1, earnings should rise across the board as employers adjust labor contracts to reflect the increase.
For those on the lowest rung of the wage scale, however, making ends meet will continue to be a struggle, since the daily minimum wage of 248.93 pesos (7,467.90 a month) still does not cover Mexico’s canasta bascia (basic basket of 123 products and services), which comes to around 11,500 pesos.
The central bank believes that economic activity will be stronger in the first half of the year, aligning with historical patterns seen in election years.