Key facts
- Mexico's annual inflation is projected to fall to 4.03% in May, down from 4.45% in April.
- Core inflation is expected to ease to 4.20% year-on-year, the lowest since May 2025.
- Monthly consumer prices are estimated to have fallen 0.12% due to seasonal electricity subsidies and lower fruit and vegetable prices.
- The central bank's target inflation rate is 3%, with a tolerance of plus or minus one percentage point.
- The central bank cut its benchmark rate by 25 basis points to 6.50% in early May.
Mexico's annual inflation is likely to have slowed in May, according to a Reuters poll of analysts, reinforcing expectations that the central bank will maintain its benchmark interest rate at current levels. The median estimate projects annual headline inflation falling to 4.03% from 4.45% in April. This would mark a second consecutive month of decline, though it remains above the central bank's target of 3% plus or minus one percentage point.
On a monthly basis, headline consumer prices are estimated to have fallen 0.12%, primarily driven by seasonal electricity subsidies and lower prices for fruits and vegetables. Core inflation, which excludes volatile items, is seen easing to 4.20% year-on-year, a fourth straight monthly decline and the lowest since May 2025. The monthly core index is expected to rise 0.24%, reflecting continued pressure on goods, partially offset by discounts from the 'Hot Sale' online shopping event.
Mexico's central bank cut its benchmark rate by 25 basis points to 6.50% in early May. Its governing board indicated it considers it appropriate to hold the rate at this level going forward. However, the decision was not unanimous, with deputy governors Jonathan Heath and Galia Borja voting to leave the rate unchanged at 6.75%.
Market expectations suggest the benchmark rate will remain at 6.50% through the end of 2026 and 2027. Official inflation data from the national statistics agency INEGI is scheduled for release on Tuesday, with the next monetary policy decision set for June 25.