Citi Mexico Expectations Survey (May 6, 2025)

Consensus continues to expect another 50bps rate cut in the May meeting. In today’s Citi Mexico Expectations Survey, all participants expect that the next move in the monetary policy rate will be in May 2025. Out of 34 participants, 33 expect a 50bps cut while another expects a 25bps cut. The median forecast for the policy rate by Y/E 2025 remains at 7.75%, with estimates ranging from 6.25% to 8.25%. For Y/E 2026 the policy rate median expectation was kept at 7.00%, relative to the previous survey.

Peso expectations was reduced for 2025 y/e. The consensus projects the USDMXN at 20.80 for Y/E 2025, lower than 20.93 in the previous survey. For Y/E 2026, it is at 21.23, three cents higher than the previous survey.

For April, the consensus projects monthly headline and core inflation at 0.31% and 0.48%, respectively. For the full month of April, analysts expect headline inflation at 0.31%MoM, or 3.91%YoY, higher than March’s rate of 3.80% and higher than the survey a fortnight ago (0.18%MoM). Core inflation is now estimated at 0.48%MoM in April, or 3.92%YoY, lower than the figure from the previous month of 3.64% and higher than the previous survey at 0.36%MoM. For May, consensus expects monthly headline and core inflation at -0.09%MoM and 0.23%MoM, respectively.

Inflation expectations remained stable for Y/E 2025 and 2026. Headline inflation projections for Y/E 2025 is now at 3.80%, slightly higher than from a fortnight ago at 3.78%, while for the core component, it rose slightly to 3.81% from 3.80% in the previous survey. For Y/E 2026, headline median expectation is at 3.80%, marginally higher than the last survey at 3.79%, while core inflation median estimation was kept at 3.70% from a fortnight ago. The median expectation for the average annual inflation rate in 2027- 2031 remained unchanged from the previous survey at 3.70%.

GDP growth median forecast declined again for 2025. The consensus now estimates 2025 GDP growth at 0.1%, lower than the 0.2% in the last survey, with estimations ranging from -0.8% to 0.7%. This is the sixth consecutive survey that consensus downgrades GDP expectation for 2025. For 2026, it was kept at 1.5%, relative to the previous survey.

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