Citi Mexico Expectations Survey (March 20, 2025)

Unanimous consensus for a 50bps rate cut in the March meeting. In today’s Citi Mexico Expectations Survey, all participants expect that the next move in the monetary policy rate is a 50bp rate cut in March 2025. The median forecast for the policy rate by Y/E 2025 was reduced to 8.00% from 8.25% in the previous survey, with estimates ranging from 7.50% to 8.75%. For Y/E 2026 the median expectation continued at 7.50%, the same as the last five surveys.

Broadly stable peso expectations. The consensus now projects the USDMXN at 20.98 for Y/E 2025, slightly lower than 21.00 in the last survey. For Y/E 2026, it continues to be at 21.50, as the last two surveys.

The consensus projects biweekly headline and core inflation at 0.17% and 0.24%, respectively, for 1H March. Survey participants forecast a 0.17%bw increase for the CPI in 1H March and core inflation is estimated at 0.24%bw. For March, analysts expect headline inflation at 0.31%MoM, or 3.80%YoY, higher than February’s rate of 3.77%. Core inflation is estimated at 0.40%MoM in March, or 3.61%YoY, lower than the figure for the previous month of 3.65%.

Inflation expectations increased slightly for Y/E 2025 and 2026. Headline inflation projections for Y/E 2025 increased marginally to 3.80% from 3.77% a fortnight ago, while for the core component, they rose to 3.75% from 3.71% in the previous survey. For Y/E 2026, headline expectations also increased to 3.78% from 3.70% in the last survey, while core inflation median estimation increased to 3.66% from 3.61% from a fortnight ago. The median expectation for the average annual inflation rate in 2027- 2031 remained practically unchanged from the previous survey at 3.70%.

GDP growth forecasts declined again for 2025 to 0.6%. The consensus now estimates 2025 GDP growth at 0.6%, lower than the 0.8% in the last survey, with estimations ranging from 0.0% to 1.3%. For 2026, it decreases marginally to 1.7% from 1.8% in the last survey.  

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