Citi Mexico Expectations Survey (Dec 5, 2024)

All respondents project a rate cut in December’s monetary policy decision. The consensus estimates that Banxico's next move to the interest rate will be a 25-bp decrease in December. Of the 34 participants, 31 project a 25-bp reduction, while 3 respondents, a 50-bp rate cut. The median of the estimates for the interest rate by Y/E 2024 remained at 10.00%. For the end of 2025, the median of expectations was also unchanged at 8.00%, with a range from 7.50% to 9.00%. 

For the full month of November, the consensus forecasts for headline and core inflation are at 0.49% and 0.07% MoM, respectively. For the month of December, analysts’ consensus sees headline and core inflation at 0.50% MoM and 0.41%, respectively. As a result, 2024 annual headline and core inflation would stand at 4.38% (from 4.45% in the previous survey) and 3.59% (from 3.75%), respectively. 

For Y/E 2025, inflation expectations remained stable compared to the previous survey. The median projection of annual headline inflation for Y/E 2025 stood at 3.83%, compared to the previous survey of 3.80%, while core inflation stood at 3.70% (unchanged compared to the previous survey). The median estimate for the average annual inflation rate in 2026-2030 was unchanged at 3.70%. 

Exchange rate estimate for 2024 was adjusted upwards. The median projection for the exchange rate by Y/E 2024 was revised upwards to 20.23 USDMXN from 20.00 in the previous survey. For Y/E 2025, the consensus estimate remained unchanged at 20.50, relative to the previous survey. 

Slightly better GDP growth projections for 2024 and 2025. For 2024, the consensus anticipates GDP growth at 1.6% (previously at 1.5%), while for next year it is estimated at 1.2% (compared to the previous survey of 1.0%).

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