Background on the Mexican Economy and Key Players
Mexico’s economic growth is expected to be modest, with a projected 0.5% increase in Gross Domestic Product (GDP) by the end of 2025, according to the latest “Citi Expectations Survey” released on Tuesday. This survey gathers insights from economic analysts regarding their projections for Mexico’s economy.
Who is Citi?
Citi, short for Citigroup Inc., is a multinational financial services corporation and one of the largest banking institutions in the world. Citi’s “Expectativas Survey” is a significant event that brings together leading economists and analysts to share their insights on Mexico’s economic outlook.
Key Findings from the Citi Survey
GDP Growth Projections
The median GDP growth projection for 2025 remains unchanged at 0.5%, within a range of -0.1% to 0.8%. For 2026, the median projection is also steady at 1.3%, mirroring the previous survey’s results.
- Steady Projections: The analysts’ projections have remained within a narrow range, indicating a cautious outlook on Mexico’s economic growth.
- Expected GDP Growth: A 0.5% growth for 2025 and 1.3% for 2026 suggests a modest recovery from the economic challenges faced in recent years.
Monetary Policy Anticipations
Most survey participants expect a 25 basis points cut in the benchmark interest rate during the upcoming November meeting of Banco de México (Banxico).
- Banxico: Banco de México is the central bank of Mexico, responsible for implementing monetary policy to maintain price stability and support sustainable economic growth.
- Interest Rate Cuts: A 25 basis points reduction in the benchmark interest rate is anticipated by 36 out of 37 surveyed experts for the November meeting, with one expert predicting a cut in December 2025.
- Median Interest Rate Projections: The median projection for the benchmark interest rate at the end of 2025 remains at 7%, while only five experts expect it to be 7.25%. For the end of 2026, the median projection is 6.50%, with estimates ranging from 6% to 7%.
Inflation Expectations
The general inflation expectations for 2025 have decreased to 3.90% annually, down from 3.96% in the previous survey. The underlying inflation projection remains at 4.20%.
- Inflation Projections: A decrease in general inflation expectations to 3.90% for 2025 and an underlying inflation projection of 4.20% indicates a cautious outlook on price stability.
- 2026 Inflation Expectations: The median projection for annual inflation at the end of 2026 is 3.80%, with underlying inflation expectations at 3.80%.
Key Questions and Answers
- What is the projected GDP growth for Mexico by 2025? The median projection is a modest 0.5%.
- When do experts anticipate a change in monetary policy by Banxico? Most analysts expect a 25 basis points cut during the November meeting.
- What are the inflation expectations for Mexico in 2025 and 2026? General inflation is expected to be 3.90% in 2025 and 3.80% in 2026, with underlying inflation projected at 4.20% for 2025 and 3.80% for 2026.
