Every atomic assertion extracted from the underlying record, ranked by evidence strength.
The priority mandate of Banco de México, as per Article 28 of the Constitution, is to seek the stability of the purchasing power of the national currency.
In March 2026, after confirming the absence of second-round effects from tax modifications, Banco de México carried out an additional 25 basis point cut to the reference rate, placing it at 6.75%.
General inflation is anticipated to converge to the 3% target in the second quarter of 2027.
Banks in Mexico have healthy capitalization and liquidity, and delinquency rates are at low levels compared to historical behavior.
Monetary policy should not react to an increase in inflation due to a supply-side shock that temporarily raises the relative price of a limited number of products and has no impact on longer-term inflation expectations.
Monetary policy must remain vigilant to avoid potential contamination of prices not directly exposed to a supply-side shock, focusing on preventing second-round effects on price formation and inflation expectations.
During 2025 and so far in 2026, Banco de México has contributed to normalizing monetary conditions in the country, given a more favorable inflationary outlook compared to pandemic shocks.
Short-term inflation faced conjunctural challenges in 2025, including an adverse shock to livestock product prices and an increase due to fiscal adjustments at the beginning of 2026, and a temporary rebound in fruit and vegetable prices.
Banco de México estimates that inflation is close to resuming a gradual decline towards the 3% target.
Longer-term inflation expectations have remained anchored despite the conflict in the Middle East and its implications for international energy prices.
The global economy has continued to experience a highly uncertain environment, manifested by changing international trade policies and materialization of geopolitical risks.
Disruptions in international oil and gas markets imply upside risks for global inflation and downside risks for global economic activity.
Global growth prospects for 2026 have been slightly reduced, and downside risks have intensified due to the repercussions of the conflict in the Middle East.
Global inflation has been hampered by the persistence of services inflation at relatively high levels in several economies and pressures from global oil prices.
Expectations for reference rates in different economies were revised upwards depending on their degree of exposure to inflationary risks derived from the Middle East conflict.
Members of the United States Federal Open Market Committee still anticipate some additional monetary accommodation for this year and next.
After a sharp increase in risk aversion following US tariff announcements in April of last year, global financial conditions showed a significant easing, leading to a 13% appreciation of the Mexican peso throughout 2025.
The outbreak of the Middle East conflict led to a new episode of risk aversion, causing losses in most assets and a tightening of financial conditions.
In an initial stage after the Middle East conflict outbreak, the exchange rate depreciated, and government bond interest rates increased, similar to other emerging and advanced economies.
As risk aversion moderated and the perception of a more adverse scenario attenuated, a significant part of the initial market movements (depreciation, rate increases) reversed.
Throughout the year, the national currency (Mexican peso) has appreciated by around 4% against the dollar, while government bond interest rates show moderate decreases.
The volatility observed in markets continues to reflect uncertainty regarding the duration and possible consequences of the Middle East conflict.
The solid fundamentals of the Mexican economy continue to be a supporting element for the performance of its financial markets.
Domestically, in 2025, national economic activity expanded at a rate of 0.6%, representing an additional deceleration compared to 2023 and 2024.
The low dynamism in 2025 was a result of weakness in secondary activities and moderation in tertiary activities.
Gross fixed investment contracted in 2025, suffering from uncertainty caused by the shift in trade policy of Mexico's main trading partner (US).
Growth of private consumption expenditure in 2025 was lower than in 2024, reflecting weakness at the beginning of the year.
Net exports expanded during 2025 despite uncertainty about US trade policy.
Negotiations with the US government resulted in effective US tariff rates on Mexico being lower than those of most other countries.
The preferential treatment of Mexican exports to the US market under the USMCA and increased use of the treaty prevented the materialization of the most adverse scenarios for Mexico's export activity.
Mexican exports were favored by the vigor of investment in the high-tech sector in the United States, boosting national exports of computer equipment and components.
Although the national economy showed greater dynamism in the last quarter of 2025, it again showed marked weakness at the beginning of 2026.
A higher growth rate than in 2025 is anticipated for 2026, but conditions of slack are expected to prevail in the national economy in the near future.
No price pressures from the demand side are anticipated due to prevailing slack in the national economy.
The balance of risks for economic activity in Mexico is considered to remain skewed downwards.
General inflation was below the upper bound of the variability interval for most of 2025, closing at 3.69%.
Since 2020, inflation had not been within the variability interval at the end of the year until 2025.
Core inflation exhibited a reduced variation throughout 2025, but increased above 4% in the second quarter.
The increase in core inflation in Q2 2025 was mainly driven by an increase in merchandise inflation from historically low levels, due to food raw material prices (including livestock) and the lagged effect of 2024 exchange rate depreciation.
The appreciation of the peso in 2025 contributed to containing pressures on merchandise prices.
Services inflation showed a decrease in 2025, but its decline was more gradual than anticipated.
Core inflation stood at 4.33% in December 2025.
Non-core inflation registered reduced levels, especially in the second half of 2025, due to negative annual variations in fruit and vegetable prices counteracting livestock prices.
The downward trajectory of the annual variation of energy prices also favored non-core inflation dynamics in 2025.
Non-core inflation stood at 1.61% at the end of 2025.
In January 2026, general inflation stood at 3.79%.
Core inflation rebounded to 4.52% in January 2026 due to a localized increase in food, beverage, and tobacco merchandise prices derived from fiscal adjustments.
The effect of the fiscal measures on annual inflation rates will drag on for twelve months, dissipating only in early 2027.
Non-core inflation continued to contribute favorably to inflation performance, registering 1.39% in January 2026.
General inflation increased to 4.53% in the first half of April 2026, mainly due to a significant, though temporary, increase in fruit and vegetable prices within the non-core component.
The effect of the increase in international oil and derivative prices on energy prices in Mexico is very limited so far due to federal government measures to contain their rise.
Core inflation has decreased since January 2026, standing at 4.27% in the first half of April.
The decrease in core inflation was due to a decrease in merchandise inflation, reflected in both food and non-food merchandise, after the January increase from fiscal modifications.
Monthly core inflation, adjusted for seasonality and annualized, increased to 6.33% in January due to fiscal adjustments, but stood at 4.08% in the first half of April.
Tax modifications at the beginning of the year resulted in a limited and one-time effect on prices, without second-round effects materializing.
So far, there have been no evident price pressures from the imposed tariff measures.
Banco de México foresees that both general and core inflation will show a decrease starting from the second quarter of 2026.
Core inflation is also anticipated to be at 3% in the second quarter of 2027.
The balance of risks for inflation in the forecast horizon remains skewed upwards.
Economic policy changes by the US administration and the exacerbation of geopolitical conflicts add uncertainty to inflation forecasts.