- The April April survey shows a strong cut in growth prospects: 2025 GDP is expected to be 0.3%, below 0.6%.
- The majority of analysts expect Banxico to cut the rates at 8.5% in May; The rate of 2025 is expected to be 8%.
On April 7, Citi revealed his latest expectations survey in Mexico, in which private economists projected that the economy would grow 0.3% in 2025, less than the 0.6% expected in the last survey. By 2026, GDP is expected to decrease 1.7% to 1.5%.
Banxico will reduce 8% rates in 2025 and 7% in 2026
For the next meeting of the Bank of Mexico (Banxico) in May, 29 analysts estimate that the Central Bank will reduce the 50 basic points (PB) to 8.50%. Three participants project a 25 -PB rates cut. For the rest of the year, Mexico’s interest rate is expected to end 8%, and by 2026, medium projections indicate 7%rates.
The USD/MXN exchange rate for the end of the year in 2025 is 20.90, and by 2026 it is projected to rise to 21.30, 20 cents less than the previous survey.
It is projected that the general inflation of March ends at 3.8% year -on -year, higher than the rate of 3.77% in February. The underlying figures are projected to end at 3.64% year -on -year, below the previous month of 3.65%.
Inflation expectations were stable in 2025, with expected general figures at 3.80% for the entire year and an increase of 3.66% to 3.7% by the end of the year. By 2026, inflation is expected to be maintained at 3.78%, without changes with respect to the previous survey.
BANXICO FAQS
The Bank of Mexico, also known as Banxico, is the central bank of the country. Its mission is to preserve the value of the Mexican currency, the Mexican weight (MXN), and set the monetary policy. For this, its main objective is to maintain low and stable inflation within the target levels – in or close to its 3%target, the midpoint of a tolerance band between 2%and 4%.
The main Banxico tool to guide monetary policy is the fixation of interest rates. When inflation is above the goal, the bank will try to control it by raising the rates, which makes the debt of homes and companies more expensive and, therefore, cools the economy. The highest interest rates are generally positive for Mexican weight (MXN), since they lead to higher yields, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken the MXN. The rate differential with the dollar, or the way in which Banxico is expected to set interest rates compared to the United States Federal Reserve (Fed), is a key factor.
Banxico meets eight times a year and its monetary policy is very influenced by the decisions of the United States Federal Reserve (Fed). Therefore, the decision -making committee of the Central Bank usually meets a week after the Fed. In this way, Banxico reacts and sometimes anticipates the monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before the Fed raised the rates, Banxico first did it in an attempt to reduce the possibilities of a substantial depreciation of the Mexican weight (MXN) and avoid capital outputs that could destabilize the country.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
