Mexico | Food basket inflation dilutes 30% increases in labor income

Summary

37.8% of the population in Mexico was in a situation of working poverty as of the second quarter of 2023, that is, close to 49.6 million people in the country were not capable of covering the cost of the food basket with their labor income.

Key points

• Key points:
• In rural areas, the population in working poverty decreased 1.7pp with respect to the level registered in the second quarter of 2022, going from 52.0% to 50.2%. In the urban area, in the second quarter of 2023, 33.9% of the population that lives in these areas had a labor income that was lower than the cost of the food basket.
• Between the first quarter of 2020 and the second quarter of 2023, the cost of the food basket increased by 30.9%, diluting the benefits of the 31.7% increase in labor income per capita registered in Mexico. The effect of inflation was much more severe for lower-income households, which spend more on food.
• In rural areas, the cost of the food basket increased 31.5% between the first quarter of 2020 and the second quarter of 2023; while in the urban area it grew 30.8%.

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