Citi Mexico Expectations Survey (Feb 20, 2025)

The next rate cut is expected for March, with a lower Y/E 2025 policy rate of 8.25%. In today’s Citi Mexico Expectations Survey, the median estimate for the next move in the monetary policy rate is a 50bps rate cut in March 2025. Of the 33 respondents, 3 expect a 25bps cut in the next meeting. The median forecast for the policy rate by Y/E 2025 stood at 8.25%, 25bps lower than in the previous survey, with estimates ranging from 8.75% to 7.00%. For Y/E 2026 the median expectation remained unchanged at 7.50%.

Stable peso expectations for 2025 and a more depreciated currency for 2026. The consensus kept the USDMXN at 21.00 for Y/E 2025 and for Y/E 2026, it increased to 21.50 from 21.30 in the previous survey.

For the full month of February 2025, analysts estimate headline inflation at 3.8%YoY. The February consensus sees headline monthly inflation at 0.31%MoM, or 3.81%YoY, higher than the 3.59% rate recorded in January. For core prices, survey respondents expect an increase of 0.42%MoM, or 3.58%YoY, below the 3.66% figure observed in the previous month. For 1H February 2025, the consensus forecasts headline inflation at 0.17%bw. For core prices, analysts project a 0.25%bw growth.

Headline inflation expectations decreased for Y/E 2025 and increased for Y/E 2026. Headline inflation projections for Y/E 2025 went down to 3.83% from 3.90% a fortnight ago, while for the core component was reduced to 3.70% from 3.74% in the previous survey. For Y/E 2026, headline expectations increased to 3.79% from 3.72% previously, while core inflation estimations also increased marginally to 3.61% from 3.60%. The median expectation for the average annual inflation rate in 2027-2031 remained unchanged from the previous survey at 3.70%.

GDP growth forecasts was lowered for 2025 to 0.9%. The consensus now projects a 2025 GDP growth of 0.9%, lower than the 1.0% in the three previous surveys. For 2026, the median GDP growth expectation remains at 1.8%.

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