Background on the Relevant Person: Banco de México
Banco de México, often abbreviated as Banxico, is the central bank of Mexico. Established in 1925, it plays a crucial role in maintaining price stability and fostering sustainable economic growth. Banxico’s primary objectives include managing monetary policy, supervising financial institutions, and promoting a sound and efficient financial system.
Key Adjustments in the Citi Survey
Economists from the financial sector have revised their GDP growth projection for this year upwards to 0.20% from the previous estimate of 0.10% on June 20, according to information disclosed in the Citi Expectations Survey.
GDP Growth Forecast
This adjusted forecast represents a third consecutive quarterly upward revision but remains far from the 0.9% estimated in February. Out of 38 analysts surveyed, 11 anticipate a contraction in the GDP data.
On May 28, during the presentation of the Quarterly Report, Banxico adjusted its growth projection to 0.1% for 2025, placing it slightly below the median GDP growth expectation of financial analysts.
At that time, Banxico stated its projection fell within a range of -0.5% to 0.7%. During the press conference, Banxico’s deputy governors, Jonathan Heath and Gabriel Cuadra, emphasized that a 0.1% growth projection signifies stagnation.
Inflation Forecast
The median expectation of the 38 analysts surveyed anticipates that the annual variation of the National Consumer Price Index (INPC) will end the year at 4%.
This projection reflects an upward revision from the 3.83% expected in February.
Monetary Policy Adjustments
According to the survey results, experts consulted predict that Banxico’s governing board will take the interest rate to 7.50% by year-end.
This forecast implies an additional cumulative cut of 500 basis points from the current rate of 8%.
The 38 analysts consulted anticipate that the upcoming rate adjustment, scheduled for August 7, will be 25 basis points.
If accurate, this would close the cycle of four consecutive 50 basis point cuts implemented in February, March, May, and June.
Future Economic Outlook
The survey results suggest that experts anticipate a rebound in the Mexican economy in 2026, with a growth rate of 1.3%. This forecast represents a downward adjustment from the 1.80% estimated in February.
The range for the 2026 GDP growth projection spans from 2% (expected by Banorte and Barclays) to a minimum of 0.2% (estimated by BNP Paribas).
For the 2026 inflation rate, analysts predict an annual variation of 3.8%, which would be a decrease from the 4% expected for this year.
Inflation expectations range from 4.25% (expected by Barclays) to a minimum of 3.20% (expected by Vector).
Key Questions and Answers
- What is the current GDP growth forecast according to the Citi Survey? The adjusted forecast for Mexico’s GDP growth is now 0.20%.
- What is the anticipated annual inflation rate? The median expectation of the 38 analysts surveyed is an annual inflation rate of 4%.
- What is the projected interest rate by year-end, according to the survey? Experts predict that Banxico will take the interest rate to 7.50% by the end of the year.
- What is the anticipated economic growth for Mexico in 2026? Analysts expect a rebound in the Mexican economy in 2026, with a growth rate of 1.3%.
- What is the predicted annual inflation rate for 2026? Analysts anticipate an annual inflation rate of 3.8% for 2026.
