The Bank of Mexico (Banxico) is scheduled to make its first monetary policy announcement of the year this Thursday. According to the Citi Expectations Survey, the market anticipates a 50 basis points cut in the interest rate, contrasting with the initial forecast of 25 basis points. Currently, Banxico's rate is at 10.00 percent after five cuts of 25 basis points throughout 2024.
According to the survey, the majority of the 35 respondents expect a 50 basis points cut in this meeting, while eight participants foresee a 25 basis points cut. The median forecast for the monetary policy rate for 2025 remains at 8.50%, Citi reported. On the other hand, some institutions such as Ve por Más, Banca Mifel, Deloitte – Econosignal, Deutsche Bank, Multiva, Oxford Economics, and Thorne & Associates estimate a 25 basis points cut, while Signum Research predicts this cut for the March meeting.
Regarding inflation projections, it is expected that the overall inflation in Mexico will close the year at 3.90% annually, slightly lower than the 3.91% annually estimated fifteen days ago. On the other hand, core inflation is expected to be at 3.74% annually, up from the previous 3.68% annually. Expectations for 2026 indicate that overall inflation will decrease to 3.72% annually, while core inflation will remain at 3.60% annually.
Additionally, it is projected that the exchange rate will reach 21.00 pesos per dollar by 2025, slightly surpassing the 20.95 from the previous survey. For 2026, the median expectation is 21.30 pesos per dollar, down from the previously forecasted 21.49.
Regarding the Gross Domestic Product (GDP), projections for this year remain at an expansion of 1.0%, unchanged in the last three surveys. For 2026, a growth of 1.80% is expected. The highest forecast for 2025 is 1.70% from Signum Research, while the lowest is 0.2% from Banamex.
