Citi's latest survey revealed that core inflation in Mexico experienced a slight reduction, reaching 3.68 percent annually instead of the previous 3.71 percent. The forecast range for the coming years varies from an optimistic 1.8 percent to a modest 0.2 percent according to analyses from various financial entities such as Masari, Signum Research, and Banamex.
The survey also showed that forecasts for the end of 2025 did not suffer significant adjustments. The estimated median remains at 8.50 percent, with forecasts ranging from 7.50 percent to 9.00 percent, according to Citi data. According to the survey, there are divided opinions on the cuts that Banxico could make to its rates, with some expecting a 25 basis point reduction while others anticipate a larger adjustment of 50 basis points.
The data collected in the survey suggest a GDP growth of 1.8 percent and an interest rate of 7.50 percent. Regarding overall inflation, it also decreased from 3.80 to 3.77 percent annually, and core inflation from 3.61 to 3.60 percent annually. Regarding the currency, the exchange rate was adjusted from 21.48 to 21.49 units.
Analyzing the estimates for the first meeting of the year of the Bank of Mexico (Banxico), a reduction of 25 basis points is anticipated; however, some institutions see a larger cut of 50 basis points, according to the Citi Expectations Survey. It is expected that, following the meeting, the reference rate could be set at 9.75 or 9.50 percent, after closing 2024 at 10.00 percent.
In light of these estimates, several market players are showing caution and no drastic changes in other economic variables have been indicated. A GDP growth of 1.0 percent is projected for the current year, an overall inflation of 3.91 percent annually, and an expected exchange rate of 20.95 pesos per dollar.
