Latam Daily: Mexican Headline Inflation Declines in March; Peru Infrastructure

• Mexico: Headline inflation shows mixed dynamics as PPI points to cooling upstream pressures

• Peru: Strong start—transport infrastructure investment accelerates in Q1-26

MEXICO: HEADLINE INFLATION SHOWS MIXED DYNAMICS AS PPI POINTS TO COOLING UPSTREAM PRESSURES

In March, headline inflation was revised downward, declining from 4.59% to 4.45%, and it remained below the consensus forecast of 4.54% (chart 1). Core inflation eased from 4.45% to 4.26%, in line with the consensus expectation. Within its components, goods inflation fell from 4.38% to 3.99%, while services continued to show pressures, reaching 4.52% from 4.51% previously (chart 2). Meanwhile, non-core inflation remained elevated, (chart 3) increasing to 5.08% from 5.05%, driven by a sharp rise in agricultural prices (7.98%), particularly fruits and vegetables (21.43%). Among the items with the greatest upward impact —ranked by incidence— tomatoes remained prominent with a monthly increase of 19.25%, followed by serrano chili peppers at 36.27% and owner-occupied housing at 0.31%. In contrast, electricity, green tomatoes, and chicken recorded price declines during the month. On a sequential monthly basis, headline inflation rose 0.20%, core inflation increased 0.31%, and non-core inflation declined by 0.18%. 

The National Producer Price Index slowed its pace in April, declining from an annual increase of 2.77% to 2.56%. By sector, a notable contraction of -3.94% was observed in primary activities, while services slightly moderated their growth, from 4.00% to 3.98%.

Within industrial activities, these remained unchanged at 2.22%, with increases of 4.15% in construction and only 0.31% in manufacturing, albeit with significant disparities. Particularly noteworthy were the strong gains in basic metal industries (22.24%), alongside declines in computer equipment manufacturing (-8.47%) and machinery and equipment manufacturing (-7.57%).

—Rodolfo Mitchell, Miguel Saldaña & Martha Cordova

PERU: STRONG START—TRANSPORT INFRASTRUCTURE INVESTMENT ACCELERATES IN Q1-26

As of the end of the first quarter of 2026 (Q1-26), recognized investment in concessioned transport infrastructure reached US$364 million, up 52% year-over-year compared to Q1-25, according to the Transport Infrastructure Investment Supervisory Agency (Ositrán). Investment recognized in February alone amounted to US$166 million, the highest level since December 2025. Both results came slightly above expectations. 

Looking ahead, we expect investment across concessioned projects to remain dynamic in the coming months. For full-year 2026, we maintain our forecast of US$1.3 billion in recognized investment, marking the third consecutive year in which investment exceeds the US$1 billion threshold. That said, upside risks remain, given several investment announcements that could be incorporated into our baseline projection.

By segment, we expect total investment to be led by rail infrastructure, with execution projected at slightly above US$550 million in 2026—primarily driven by the Lima Metro Line 2 project—broadly in line with the average of the past three years. This would be followed by airport infrastructure, with investment expected to exceed US$460 million, based on Ositrán data. Port infrastructure would contribute slightly more than US$160 million, while road infrastructure investment is projected to surpass US$130 million, close to the average observed over the past four years.

Investment in Q1-26

As noted above, total recognized investment in transport infrastructure reached US$364 million in Q1-26, marking the strongest start to a year in recent periods (see charts 4–5). Execution was mainly driven by investments in projects such as the expansion of Jorge Chávez International Airport (US$192 million), Lima Metro Line 2 (US$126 million), the IIRSA Norte highway project (US$11.2 million), and Road Network No. 6 (US$8.1 million).

Key Projects

Within the rail infrastructure segment, the most prominent project remains Lima Metro Line 2, which has reached a physical progress of over 80% across the full alignment—including Line 2 and the Line 4 branch, totaling 35 km. Of the 27 km of tunnels planned for Line 2, more than 25 km have already been completed. Progress has also accelerated in recent months on the Line 4 section (8 km), where the tunnel boring machine has reached 53% completion. Investment has been directed toward the procurement of electromechanical equipment, station materials, tunnel lining segments, superstructure works for sections 1B and 2, installation of systems, and civil works at ventilation shafts and stations. In the airport segment, investments were primarily recognized in works at Jorge Chávez International Airport, as well as in the acquisition of equipment for the second group of regional airports (close to US$1 million). In ports, investment included complementary works for liquid bulk handling at the North Terminal of Callao (approximately US$4 million), with additional works expected in the coming months (corresponding to Stage 3A and expanded access for general cargo). Further investment was also recorded at the Port of Salaverry, where bulk storage capacity expansion is expected to be completed by end-2026. Finally, investment in concessioned roads included works on Road Network No. 6 (grade separations), IIRSA Norte (sections 1 and 3), the Autopista del Sol (works in Lambayeque), and IIRSA Sur – Section 4, including tunnel works and a bypass road.

—Carlos Asmat