Mexico Economic Outlook Downgraded, Inflation and Interest Rates in Focus
The outlook for Mexico has been revised downwards for the end of 2024, according to the Citibanamex Survey. This survey, which polled leading economic experts, follows the recent “Black Monday” event, where the projected GDP growth for the year was lowered from 1.9% to 1.7%.
The median projection for GDP growth in 2025 remained unchanged at 1.5%.
The survey also revealed that general inflation for 2024 has increased, with the projection rising to 4.60% from 4.40% in the previous poll. The underlying inflation component remained at 4%, while the median expectation for inflation in 2025 climbed to 3.90% from 3.85%.
The median estimate for the exchange rate at the end of the year was 19 pesos per dollar, slightly higher than the previous forecast of 18.80. The projection for the end of 2025 rose to 19.70 pesos per dollar from 19.40.
Regarding interest rates, the bank reported that the consensus now anticipates a rate cut until September. The median estimate for the interest rate at the end of 2024 climbed to 10.50% from 10.25%, with projections ranging from 10% to 11%. For 2025, the median expectation among experts rose to 8.50% from 8.38%, with a range of 7% to 10%.
The survey also addressed inflation, with projections of annual headline and core inflation for July at 5.5% and 4.0%, respectively. Monthly inflation is expected to be 1.02% in July, leading to an annual increase of 5.54%. Core inflation is estimated to be 0.29% in July, or 4.02% annually.