Citi Mexico Expectations Survey (Jan 21, 2025)

Next rate cut still expected in February; consensus see the policy rate by Y/E 2025 at 8.50%. In today’s Citi Mexico Expectations Survey, the median estimate for the next movement in the monetary policy rate remains a 25bp cut in February 2025 (unchanged from the last survey). Of the 30 respondents, 17 expect the next cut will be of 25bps, while 13 participants expect it of 50bps.  The median forecast for Y/E 2025 remained unchanged at 8.50%, with estimates ranging from 7.50% to 9.00%. For Y/E 2026, the median projection remained at 7.50%, with estimates ranging from 6.00% to 8.75%.

Peso expectations remained unchanged for 2025 and 2026. The consensus now expects the USDMXN at 20.95 by Y/E 2025, same estimate as our previous survey. For Y/E 2026, the consensus projects the USDMXN at 21.49, from 21.48 a fortnight ago.

For 1H January, the consensus forecasts headline inflation at 0.27%bw. For core prices, analysts project growth of 0.23%bw. For the full month of January, analysts estimate headline inflation at 0.42%MoM (compared to 0.51% in the previous survey), while for core inflation, survey respondents expect an increase of 0.37%MoM, marginally higher than the 0.35% figure observed the previous survey.

Slightly lower inflation expectations for Y/E 2025 and 2026. Headline inflation projections for Y/E 2025 were unchanged from a fortnight ago, at 3.91%, and for the core component declined slightly to 3.68% from 3.71% in the last survey. For Y/E 2026, headline and core inflation expectations were at 3.77% and 3.60%, respectively, below from the projections of 3.80% and 3.61% in the previous survey. The median expectation for the average annual inflation rate in 2027-2031 stood at 3.70%.

GDP growth forecasts remain unchanged for 2025 and 2026 but decrease for 2024. The consensus continues to project 2025 and 2026 GDP growth at 1.0% and 1.8%, respectively. For 2025, the estimates range from 0.2% to 1.8%. For 2024, the consensus now expects a GDP growth of 1.5%, from 1.6% in our previous survey.

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