Mexico's year-on-year headline inflation is likely to have cooled in July to its weakest level since May 2020, according to the median outcome from a Reuters survey of 18 economists. The projected 3.12% annual pace would mark a fourth consecutive monthly drop as declines in food prices largely offset seasonal upward pressure from tourism-related services.
Poll details and readings
The median forecast from the 18 analysts in the poll put annual headline inflation at 3.12% for July. Core inflation, which excludes a set of more volatile items, is estimated in the poll to have slowed to 3.94% - a level the analysts say is the lowest since April 2025. On a month-on-month basis, consumer prices are estimated to have risen by 0.03% in July, with core prices likely increasing 0.22%.
Implications for monetary policy
The softer inflation backdrop is expected to keep the central bank - Banxico - on pause. Market participants in the poll anticipate Banxico will maintain its benchmark interest rate when it announces its monetary policy decision later on Thursday, extending the halt that began in June.
Analyst commentary and cautionary notes
Analysts cautioned that disinflation appears to be proceeding, but that risks remain. Andres Abadia of Pantheon Macroeconomics was quoted as saying the disinflation process is on track, while noting that inflation in the services sector may encourage a cautious stance from Banxico. Barclays warned that food prices could rebound toward year-end and that planned minimum wage increases could sustain inflationary pressures in services.
Next data release
Mexico's statistics agency, INEGI, is scheduled to publish the official inflation figures on Friday, which will confirm whether the poll projections align with the published data.
Summary
A Reuters poll of 18 analysts indicates Mexico's annual headline inflation likely fell to 3.12% in July, the lowest since May 2020, while core inflation likely eased to 3.94%. Month-on-month consumer prices are projected to have risen 0.03% and core prices 0.22%. The softer readings are expected to reinforce Banxico's decision to keep interest rates unchanged at its upcoming meeting, though services inflation and potential food price rebounds are noted risks.