Banco de México (Banxico) released its Quarterly Report for January–March 2025, in which the central bank revised its Gross Domestic Product (GDP) forecasts for 2025 and 2026 downward compared to the report from 2024.
Inflation in 2025 is expected to rise, while Banxico Governor Victoria Rodriguez Ceja noted that “going forward, it could continue calibrating the monetary stance and consider adjusting it by a similar amount as May 50 bp cut.”
Key Quotes
- Forecasts 2025 GDP growth at 0.1% versus 0.6% in previous report.
- Forecasts 2026 GDP growth at 0.9% versus 1.8% in previous report.
- Forecasts average annual headline inflation in Q4 2025 at 3.3% vs estimate of 3.3% in previous quarterly report.
- Forecasts average annual core inflation in Q4 2025 at 3.4% vs estimate of 3.3% in previous quarterly report.
- Forecasts average annual headline inflation in Q4 2026 at 3.0% vs estimate of 3.0% in previous quarterly report.
- Forecasts average annual core inflation in Q4 2026 at 3.0% vs estimate of 3.0% in previous quarterly report.
- Headline inflation seen converging to 3% target in Q3 2026, vs Q3 2026 in prior quarterly report.
- Banxico Governor Rodriguez: The governing board estimates that going forward it could continue calibrating the monetary stance and consider adjusting it by a similar amount as May 50 bp cut.
- Board anticipates that the inflationary environment will allow the cycle of reference rate cuts to continue, while maintaining a restrictive stance.
- National economic activity is expected to remain sluggish over the forecast horizon.
