Key facts
- Mexico's annual headline inflation is forecast to reach 3.12% in July.
- This projected rate would be the lowest since May 2020.
- Core inflation is expected to fall to 3.94% in July.
- Mexico's central bank held its benchmark interest rate steady at 6.50%.
- This marks an extension of the pause in rate decisions that began in June.
Mexico's annual headline inflation is anticipated to have slowed to 3.12% in July, reaching its lowest point since May 2020, according to a Reuters poll of 18 analysts. This disinflationary trend is attributed to declining food prices, which have counteracted seasonal increases in tourism-related costs. Core inflation, excluding volatile items, is also projected to have eased to 3.94%, its lowest since April 2025. Consumer prices are estimated to have seen a modest monthly increase of 0.03%, with core prices rising by 0.22%. The anticipated inflation figures would bring the rate closer to Banxico's target range of 3% plus or minus one percentage point. Despite the disinflationary progress, analysts suggest that services sector inflation may prompt the central bank to maintain a cautious stance. Barclays has cautioned that food prices could rise again towards the end of the year, and potential minimum wage hikes might prolong inflationary pressures in the services sector. Mexico's National Institute of Statistics and Geography (INEGI) is scheduled to release the official inflation data on Friday. Mexico's central bank held its benchmark interest rate steady at 6.50% on Thursday, extending the pause in its easing cycle that began in June. The five-member board was unanimous in its decision, concluding its more than two-year easing cycle. Markets had widely expected the decision, with many analysts anticipating the hold to extend through the rest of 2026.