Introduction to the Citi Survey and Key Findings
According to a recent Citi survey, Mexico’s economic growth is expected to remain at 0.10% for the year, with no changes from the forecast made on May 20th. This marks the third consecutive quincena where analysts predict this level of performance, halting the downward trend observed in March and April.
Analysts’ Predictions on GDP and Inflation
The survey, which included 33 analysts, revealed a range of predictions for the GDP growth from -0.8% to 0.7%. Eleven of these analysts anticipated a contraction in the PIB data.
Regarding inflation, analysts revised their expectations upwards to 3.90% from the previous 3.85% forecasted in late May. This represents three consecutive quincenal increases since the 3.78% estimate on April 20th.
Bank of Mexico’s Growth and Interest Rate Adjustments
On May 28th, during the presentation of the Quarterly Report, the Bank of Mexico adjusted its growth forecast to 0.1%, within a range of -0.5% to 0.7%. In the online press conference, Banco de Mexico’s deputy governors, Jonathan Heath and Gabriel Cuadra, stated that a 0.1% forecast indicates stagnation.
Flexibilization in Interest Rates Expected
Based on the survey results, experts predict that the Banco de Mexico’s governing board will raise the interest rate to 7.50% by the end of the year. This suggests an additional cumulative reduction of 100 basis points from the current rate of 8.50%.
The next interest rate adjustment, scheduled for June 26th, is expected to be another 50 basis points reduction, following three similar adjustments since February.
Economic Rebound in 2026 and Monetary Policy
The Citi survey results indicate that Mexico’s economy is expected to experience a rebound in 2026, with a growth rate of 1.4%, unchanged from the May 20th estimate.
The range for the 2026 GDP expectations 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 a yearly variation of 3.74%, showing a downward trend compared to this year’s inflation.
The inflation expectations range from 4.20% (expected by Barclays) to a minimum of 3.20% (expected by Vector).
Regarding monetary policy, analysts anticipate that the interest rate will end the year at 6.70%, considering the possibility of the normalization cycle continuing into 2026.
Key Questions and Answers
- What is the current GDP growth forecast for Mexico? The Citi survey predicts a 0.10% growth for Mexico’s GDP this year.
- Why have analysts stopped reducing their GDP growth expectations? After a trend of reductions in March and April, analysts have maintained the 0.10% growth forecast for three consecutive quincenas.
- What is the current inflation forecast, and how has it changed? The inflation forecast stands at 3.90%, up from the previous 3.85% after three consecutive quincenal increases.
- What interest rate adjustments do experts anticipate from the Bank of Mexico? Analysts predict that the Bank of Mexico will raise the interest rate to 7.50% by year-end, with an additional cumulative reduction of 100 basis points.
- When is the next interest rate adjustment expected, and by how much? The next adjustment, scheduled for June 26th, is expected to be a 50 basis points reduction, following three similar adjustments since February.
- What are the economic growth and inflation expectations for 2026? Analysts predict a 1.4% growth rate and a 3.74% annual inflation variation for Mexico in 2026.
