Our Thoughts On the Mexican Economy

The main concern for 2025 is the impact of US policy change on Mexico. Specifically, the impact of forced repatriation of illegal Mexican immigrants to the US; and the impact on trade.

Inflation trend is proving broadly good, with the latest CPI inflation rate at 4.2% and core inflation at unde 4%, so within the 2-4% target. The central bank does not see inflation falling to 3% until the end of 2025. Policy interest rate has been held at above 10%, which looks high, although fast broad money growth poses a risk to higher inflation.