Citi Mexico Expectations Survey (Jan 7, 2025)

The next rate cut is expected by February; consensus estimates the policy rate by Y/E 2025 and 2026 at 8.50% and 7.50%, respectively. In today’s Citi Mexico Expectations Survey, the median estimate for the next move in the monetary policy rate is for a 25bp cut in February 2025. From the 32 respondents, 30 expect the next cut in February meeting while 2 participants expect it in March. From 31 respondents, 23 expect the next cut will be a 25bp cut while 8 participants expect it a 50bp cut. The median forecast for the rate by Y/E 2025 remained unchanged at 8.50%, with estimates ranging from 7.25% to 9.0%. For Y/E 2025, the median expectation is at 7.50%, with estimates ranging from 5.25% to 8.75%.

Slightly stronger peso expectations for 2025. The consensus now expects the USDMXN at 20.95 by Y/E 2025, lower than the 21.00 estimate in our previous survey. For Y/E 2026, consensus expects the USDMXN at 21.48.

The consensus projects headline and core inflation at 4.3% and 3.6%YoY, respectively for Y/E 2024. Survey participants forecast a 0.43%MoM CPI increase in December, lower than the previous survey (0.50%). Core inflation is estimated at 0.50%MoM in December, higher than the last survey (0.45%). For January 2025, analysts expect headline inflation at 0.51%MoM, and core inflation at 0.35%MoM.

Expectations for Y/E 2025 headline inflation increased at the margin. Headline inflation projections for Y/E 2025 increased at the margin: 3.90% from a fortnight ago to 3.91%, and for the core component they increased to 3.71%. For Y/E 2026, headline and core inflation expectations were at 3.80% and 3.61%, respectively. The median expectation for the average annual inflation rate in 2026-2030 was at 3.71%, practically unchanged from the previous survey.

Stable GDP growth forecasts for 2024 and weaker for 2025. The consensus continues to project GDP growth at 1.6% in 2024, the same as a fortnight ago. For 2025, the median GDP growth projection rose slightly to 1.0% from 1.2% two weeks ago, with the range of estimations going from 0.2% to 2.0%. Finally, for 2026, survey respondents expect GDP growth at 1.8%.

This survey contains thematic content and is not investment research, nor does it constitute financial, economic, legal, tax or accounting advice. This survey is provided for information purposes only and does not constitute an offer or solicitation to purchase or sell any financial instruments. The contents of this survey are not based on your individual circumstances and should not be relied upon as an assessment of suitability for you of a particular product, security, or transaction. The information in this survey is based on generally available information and, although obtained from sources believed by Citi to be reliable, its accuracy and completeness are not guaranteed. Past performance is not a guarantee or indication of future results. © 2025 Citigroup Global Markets Inc. Member SIPC. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.