Mexico 2026 core CPI seen at 4.15% vs previous 4.10%: Citi

Mexico 2026 core CPI seen at 4.15% vs previous 4.10%: Citi

Mexico’s 2026 Core CPI Seen at 4.1% as Inflation Trends and Policy Outlook Evolve

The latest Citi Mexico Expectations Survey, conducted on February 4, 2026, indicates that the median projection for Mexico's core inflation rate at year-end 2026 has edged higher to 4.1%, up from 4.0% in the January 6 survey. This reflects a cautious adjustment in expectations amid persistent inflationary pressures. For 2027, core inflation forecasts also rose marginally to 3.71%, compared to 3.7% previously.

Recent data underscores the challenge of containing inflation. Mexico's annual core inflation accelerated to 4.52% in January 2026, driven by higher taxes on goods like tobacco and soft drinks, as well as rising service-sector costs. This outpaced the Citi survey's January forecast of 4.49% YoY for core inflation. Meanwhile, headline inflation stood at 3.83% YoY for January, slightly above December's 3.69%.

Monetary policy expectations remain anchored to a 25-basis-point rate cut by Banxico in May 2026, with the policy rate projected to stabilize at 6.50% by year-end 2026 and 2027. The February survey saw increased confidence in the May cut, with 20 of 35 respondents anticipating the move, up from 18 in January. Peso expectations also improved, with the median forecast for the USD/MXN exchange rate at 18.35 by year-end 2026, down from 18.75 in the prior survey.

Economic growth forecasts for 2026 were revised upward to 1.4% in February, from 1.3% in January, reflecting improved business and consumer sentiment. For 2027, GDP growth expectations remain steady at 1.8%.

While inflation remains above Banxico's target range, the gradual easing of monetary policy and stabilizing peso suggest a cautious path toward equilibrium in 2026.