Inflation at the beginning of 2025 showed a significant decrease, standing at 3.69% during the first half of January, within the target range of the Bank of Mexico, which is 3% plus or minus one percentage point. This data, published this Thursday morning, is below market expectations and represents the lowest level since February 2021. The low inflation is largely explained by the slowdown in the fruit and vegetable sector, as well as in some services.
In contrast to the previous half-month, inflation was at 0.20%, down from the previous 0.39%, with some pressures coming from the energy sector (gasoline and electricity) and some foods. Despite this positive data, attention is paid to the behavior of core inflation, which is key for the medium and long-term trajectory. In this sense, a biweekly increase of 0.28% was recorded, slightly above the historical average for the first half of January (0.26%), mainly driven by goods, while services declined.
Banamex analysts explain that "these results indicate a gradual change in trend among the components of core inflation, with a decrease for services and an increase for goods, as we had anticipated". This scenario maintains analysts' projections that, while inflation will continue to decrease, it will do so gradually throughout the year.
Specialists also state that, following these results, the expectation is reinforced that in February the Bank of Mexico (Banxico) will decide to apply another cut to the interest rate in its first meeting of the year. The majority of consensus estimates a 25 basis point adjustment will take place, despite divisions among the members of the board led by Victoria RodrÃguez Ceja.
