Key Economic Updates from Citi Expectations Survey
According to the latest Citi Expectations Survey, analysts have revised their economic growth projection for Mexico in 2025 from 0.2% to 0.3%, and for 2026, they’ve increased it from 1.2% to 1.4%. The estimates for 2025 range from -0.3% to 0.8%, while projections for the following year fall between 0.6% and 2.0%
Strengthening Outlook for the Mexican Peso
Analysts have also improved their expectations for the Mexican peso by the end of the year, projecting an exchange rate of 19.60 pesos per dollar by December 2025, an improvement from the previous projection of 19.80 pesos per dollar.
Moderate Inflation Expectations
For July, analysts project monthly general and underlying inflation at 0.28% and 0.30%, respectively.
- Annual Inflation: General inflation is expected to be at 3.53%, an improvement from June’s 4.32% reported by the National Institute of Statistics and Geography (Inegi).
- Underlying Inflation: Excluding more volatile items like food and energy, analysts project an annual underlying inflation rate of 4.22% for July, a slight improvement from the previous month’s 4.24%.
- Year-End Inflation Projections: Analysts have raised their year-end underlying inflation projection to 4.10% from the previous 4.03%, while general inflation is expected to be at 4.0%.
Anticipation of a 25 Basis Points Rate Cut by Banxico
Analysts anticipate a 25 basis points reduction in the reference rate during the upcoming monetary policy announcement by the Bank of Mexico’s Governing Board on August 7.
- Rate Cut Timing: Only one analyst expects a rate cut by September, while the rest anticipate an announcement on August 7. If analysts’ projections materialize, the reference rate would be 7.75% following the August 7 announcement.
- Future Rate Projections: By the end of 2025, analysts predict a reference rate of 7.50%, and for the end of 2026, their median rate forecast is 6.75%.
