Banxico lifts 2026 GDP forecast, delays inflation target return
On Wednesday, the Bank of Mexico (Banxico) releases its Quarterly Report for Q2 2026, in which the institution revises its forecasts for economic growth and inflation.
The Bank of Mexico (Banxico) has raised its 2026 GDP growth forecast to 1.5% from the previous 1.1%, while pushing back the expected return to its 3% inflation target from the second quarter of 2027 to the final quarter of the same year. Core inflation for Q4 2026 is projected at 3.5%, up from 3.4% in the prior estimate. For 2027, GDP growth is forecast at 2.0%, compared to 2.1% in the prior report, and annual inflation at 3.0%, unchanged from the previous estimate.
The Mexican economy faces a weakening period and complex external environment, with significant geopolitical risks. The central bank's inflation expectations remain skewed to the upside due to persistent core inflation, trade disruptions, geopolitical tensions, climate shocks, cost pressures, and potential peso depreciation. The GDP forecast revision is attributed to stronger-than-anticipated economic activity growth in the second quarter.
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