Mexico recorded a slowdown in annual inflation in April, marking the first monthly deceleration this year, official data showed on Thursday. Headline consumer prices rose 4.45% in the 12 months through April, down from a 4.59% increase in March and marginally below the 4.50% projection in a Reuters poll of economists.
The measure of core inflation, which strips out volatile items, also moderated. The core index was reported at 4.26% in April, easing from 4.45% in March and just beneath the 4.27% forecast.
Analysts noted that the softer readings could influence monetary policy. Mexico’s central bank, Banxico, is due to announce its policy decision later on Thursday, following an unexpected 25-basis-point reduction in March that set the benchmark interest rate at 6.75%.
Markets expect Banxico to complete the monetary easing cycle that began more than two years ago with a final 25-basis-point cut to the policy rate. Despite the recent moderation in both headline and core inflation, the rate of price growth remains above the central bank’s stated target range of 3%, plus or minus one percentage point.
Context and implications
April’s numbers provide the first sign in 2026 that inflationary pressure may be easing, offering potential room for a continuation of policy easing. At the same time, with inflation still above the target range, the central bank faces a trade-off between responding to recent disinflation and ensuring that price growth moves sustainably back toward target.
How Banxico frames April’s data and its forward guidance will be closely watched by financial markets and sectors sensitive to interest-rate moves.
Data snapshot
- Headline consumer inflation: 4.45% year-on-year in April (March: 4.59%; poll: 4.50%).
- Core inflation: 4.26% in April (March: 4.45%; poll: 4.27%).
- Policy backdrop: Banxico cut rates unexpectedly by 25 basis points in March, leaving the benchmark at 6.75%.
- Policy outlook: Markets expect a final 25-basis-point cut to end the easing cycle that began over two years ago.
What to watch next
The central bank’s policy statement later on Thursday and any accompanying commentary will be pivotal for short-term market reactions and expectations for future rate moves.