- Mexico: 2025 inflation and rate expectations revised lower in Banxico Survey; Remittances continued to decline in August
MEXICO: 2025 INFLATION AND RATE EXPECTATIONS REVISED LOWER IN BANXICO SURVEY
According to private sector economic participants in the Banxico Survey, headline inflation expectations for the end of 2025 decreased from 3.97% to 3.85% y/y compared to the August survey, while expectations for the end of 2026 increased from 3.70% to 3.80%. However, core inflation expectations for year-end 2025 and 2026 were revised upward from 4.11% to 4.18% and from 3.72% to 3.78%, respectively.
Real GDP growth expectations for 2025 rose to 0.5% from 0.4% in the previous survey. For 2026, projections remained broadly unchanged at 1.35%.
Exchange rate expectations for the Mexican peso against the U.S. dollar for year-end 2025 and 2026 declined from 19.50 to 19.01 and from 20.00 to 19.80, respectively.
Finally, expectations for Banco de México’s policy interest rate were revised downward for year-end 2025 from 7.25% to 7.00%, and for 2026 from 6.75% to 6.50%.
REMITTANCES CONTINUED TO DECLINE IN AUGUST
In August, remittances deepened their annual decline to -8.3% y/y (vs. -4.7% previously), totaling USD 5.6 billion. Over the past twelve months, remittances amounted to USD 62.2 billion, representing a -4.06% annual drop and marking three consecutive months of contraction (chart 1).
Additionally, total transfers recorded five straight months of annual declines, now at -7.2%, with the average amount per transaction falling to USD 402.5 (-1.2% y/y). U.S. immigration policy, along with a slowdown in its economy, poses a significant risk to remittance flows for the remainder of the year.
—Rodolfo Mitchell & Miguel Saldaña
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