Citi Mexico Expectations Survey (July 22, 2025)

Consensus continues to expect a 25bps rate cut in the August meeting. In today’s Citi Mexico Expectations Survey, most participants expect that the next move in the monetary policy rate will be in August 2025, and all expect a 25bps cut as the next move. Out of 37 participants, 35 expect a cut in August while 2 analysts expect it in September. The median forecast for the policy rate by Y/E 2025 was kept at 7.50% from four fortnights ago, with estimates ranging from 7.00% to 7.75%. For Y/E 2026, the policy rate median expectation was kept at 6.75% compared to the previous survey.

Peso expectations were reduced again for 2025 and 2026 y/e. The consensus projects the USDMXN at 19.85 for Y/E 2025, lower than 20.00 in the previous survey. For y/e 2026, it is at 20.30, 20 cents lower than the previous survey.

For the 1H of July, the consensus projects headline and core inflation at 0.25% and 0.20%, respectively. For the full month of July, analysts expect headline inflation at 0.38%MoM, or 3.63%YoY, lower than June’s rate of 4.32% and higher than the survey a fortnight ago (0.36%MoM). Core inflation is now estimated at 0.34%MoM in July, or 4.27%YoY, higher than the figure from the previous month of 4.24%YoY and slightly higher than the previous survey at 0.28%MoM.

Core Inflation expectations increased slightly for Y/E 2025. Headline inflation projections for Y/E 2025 was kept at 4.00% as in the previous survey, while for the core component, it is now at 4.03% from 4.00% a fortnight ago. For Y/E 2026, the headline median expectation was kept at 3.80%, while core inflation median estimation decreased slightly to 3.70% from 3.73%, both compared to the previous survey. The median expectation for the average annual inflation rate in 2027-2031 remained unchanged compared to the previous survey at 3.70%.

GDP growth median expectations remained stable. The consensus estimates 2025 GDP growth at 0.2%, the same as the last survey, with estimations ranging from -0.5% to 0.7%. For 2026, it was reduced to 1.2% from 1.3% in the previous survey.

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