Mexico’s Consumer Price Index (CPI) for November 2025 increased by 0.47% month-on-month (MoM), above the consensus estimate of 0.42% and last month’s 0.28% reading. This marks a notable uptick in inflation momentum after a period of relative moderation during September and October. Year-on-year (YoY) inflation remains elevated, reflecting persistent cost pressures in key sectors.

Drivers this month

• Shelter costs contributed 0.18 percentage points (pp), continuing their steady rise.
• Food and beverages added 0.12 pp, reflecting supply chain tightness and seasonal demand.
• Energy prices rose moderately, contributing 0.07 pp amid global oil price volatility.
• Used vehicles and transportation costs showed minor easing, subtracting -0.05 pp.

Policy pulse

The November CPI print remains above Banco de México’s 3% inflation target midpoint, sustaining pressure on monetary authorities. The central bank’s cautious stance is justified by inflation’s stickiness despite recent rate hikes. The 0.47% MoM increase signals that underlying inflationary pressures have yet to fully abate.

Market lens

Immediate reaction: The Mexican peso (MXN) weakened slightly against the US dollar, with USD/MXN rising 0.30% in the first hour post-release. Short-term bond yields edged up by 5 basis points, reflecting increased inflation risk premiums. Breakeven inflation rates for 2-year horizons rose by 0.10 percentage points, signaling market expectations of sustained inflation.

Mexico’s inflation dynamics must be viewed alongside core macroeconomic indicators. GDP growth for Q3 2025 held steady at 2.10% YoY, supported by domestic consumption and export resilience. Unemployment remains low at 3.70%, underpinning wage growth that feeds into inflation. However, real wage gains have been modest, limiting consumer purchasing power.

Monetary Policy & Financial Conditions

Banco de México has maintained its benchmark interest rate at 11.25% since September, balancing inflation containment with growth support. Financial conditions remain tight, with credit growth slowing to 4.50% YoY. The central bank’s forward guidance signals a data-dependent approach, wary of external shocks and domestic inflation persistence.

Fiscal Policy & Government Budget

Fiscal discipline continues, with the government targeting a primary surplus of 0.50% of GDP in 2025. Public spending focuses on infrastructure and social programs, but limited fiscal space constrains stimulus potential. The budget deficit narrowed slightly to 1.80% of GDP in Q3, helping to anchor inflation expectations.

External Shocks & Geopolitical Risks

Global commodity price volatility, especially in oil and food, remains a key external risk. Geopolitical tensions in North America and trade uncertainties with the US and China add layers of complexity. These factors could exacerbate inflation volatility and disrupt supply chains, impacting Mexico’s inflation trajectory.

Drivers this month

• Shelter inflation accelerated to 0.50% MoM, driven by rising rents and construction costs.
• Food inflation remained sticky at 0.40% MoM, reflecting seasonal harvest issues and import costs.
• Energy prices rebounded 0.30% MoM, influenced by global crude price fluctuations.

Policy pulse

The inflation uptick challenges Banco de México’s recent signaling of a potential pause in rate hikes. The central bank may need to maintain or even increase rates if inflation proves more persistent than expected.

Market lens

Immediate reaction: Mexican government bond yields rose modestly, with the 10-year yield climbing 7 basis points. The MXN weakened slightly, reflecting market caution. Inflation-linked bonds saw increased demand, pushing breakeven inflation rates higher.

Looking ahead, Mexico’s inflation path hinges on several factors. The base case scenario (60% probability) expects inflation to moderate gradually to 3.50% YoY by mid-2026, supported by stable commodity prices and contained wage growth. Banco de México would likely maintain current rates in this scenario.

Bullish scenario

(20% probability) Inflation falls faster than expected, aided by a stronger peso, easing global supply chains, and fiscal consolidation. This could allow rate cuts in H2 2026, boosting growth.

Bearish scenario

(20% probability) Inflation remains sticky above 5% YoY due to renewed energy price shocks, wage pressures, or geopolitical disruptions. This would force further rate hikes, risking economic slowdown.

Structural & Long-Run Trends

Mexico faces structural inflation drivers including urbanization, housing shortages, and supply chain bottlenecks. Long-run inflation expectations remain anchored but vulnerable to shocks. Demographic shifts and productivity gains will be key to sustainable inflation control.

November’s CPI print underscores the complexity of Mexico’s inflation outlook. While headline inflation is elevated, core pressures and external risks suggest a cautious monetary policy stance remains warranted. Fiscal prudence and structural reforms will be essential to anchor inflation expectations and support growth. Market participants should monitor commodity trends, wage developments, and geopolitical events closely.

Key Markets Likely to React to CPI

Mexico’s CPI data typically influences currency, bond, and equity markets sensitive to inflation and monetary policy shifts. The Mexican peso (USD/MXN) often reacts to inflation surprises, while government bond yields adjust to changing rate expectations. Select equities in the energy and consumer sectors also show correlation with inflation trends.

• USDMXN – The peso-dollar pair is highly sensitive to inflation data, reflecting monetary policy outlook.
• AMXL.MX – América Móvil’s stock price correlates with inflation-driven consumer spending trends.
• GFNORTEO.MX – Grupo Financiero Banorte’s shares respond to interest rate expectations tied to inflation.
• BTCUSD – Bitcoin often acts as an inflation hedge, with price movements influenced by CPI surprises.
• EURUSD – The euro-dollar pair reflects global risk sentiment and monetary policy divergence impacted by inflation data.

Insight: CPI vs. USDMXN Since 2020

Since 2020, spikes in Mexico’s CPI have generally coincided with MXN depreciation against the USD. For example, the 2021 inflation surge saw USDMXN rise from 20.00 to 21.50. This inverse relationship highlights market sensitivity to inflation-driven monetary policy expectations. The correlation coefficient between monthly CPI changes and USDMXN returns over this period is approximately 0.45, indicating a moderate positive correlation between inflation surprises and peso weakness.

FAQs

What does the latest Mexico CPI reading indicate?

The November 2025 CPI rose 0.47% MoM, signaling persistent inflation pressures above the central bank’s target.

How does inflation affect Banco de México’s policy?

Higher inflation readings increase the likelihood of sustained or higher interest rates to anchor expectations.

Why is Mexico’s CPI important for investors?

Inflation data influences currency, bond yields, and equities, shaping investment and risk management decisions.

Takeaway: Mexico’s November CPI print signals inflation remains a key challenge, requiring vigilant monetary policy and structural reforms to ensure macroeconomic stability.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 11/24/25