Citi Mexico Expectations Survey (April 7, 2025)

Consensus expects another 50bps rate cut in the May meeting. In today’s Citi Mexico Expectations Survey, 29 participants expect that the next move in the monetary policy rate is a 50bp rate cut in May 2025, reaching an 8.50% level, while three participants expect a 25bps cut. The median forecast for the policy rate by Y/E 2025 was kept at 8.00% compared to the previous survey, with estimates ranging from 6.25% to 8.25%. For Y/E 2026 policy rate median expectation decreased to 7.00%, 50bps less than the last survey.

Peso expectations continue to decrease, albeit slightly. The consensus now projects the USDMXN at 20.90 for Y/E 2025, slightly lower than 20.98 in the last survey. For Y/E 2026, it is now project at 21.30, 20 cents lower than the previous survey.

For March, the consensus projects monthly headline and core inflation at 0.31% and 0.43%, respectively. For the full month of March, analysts expect headline inflation at 0.31%MoM, or 3.80%YoY, higher than February’s rate of 3.77% and the same level as a fortnight ago. Core inflation is now estimated at 0.43%MoM in March, or 3.64%YoY, lower than the figure from the previous month of 3.65% and marginally higher than the previous survey at 0.40%MoM. For April, consensus expects monthly headline and core inflation at 0.05%MoM and 0.30%MoM, respectively.

Inflation expectations remained stable for Y/E 2025 and 2026. Headline inflation projections for Y/E 2025 decreased marginally to 3.78% from 3.80% a fortnight ago, while for the core component, they rose slightly to 3.76% from 3.75% in the previous survey. For Y/E 2026, headline median expectation is at 3.78%, same as the last survey, while core inflation median estimation increased slightly to 3.70% from 3.66% 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 forecasts declined again. The consensus now estimates 2025 GDP growth at 0.3%, lower than the 0.6% in the last survey, with estimations ranging from -0.5% to 0.7%. For 2026, it decreased to 1.5%, from 1.7% in the last survey. 

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