Mexico's central bank, the Bank of Mexico (Banxico), raised its 2026 economic growth forecast and extended the timeline for headline inflation to reach its 3% target. The adjustments were announced on Wednesday, reflecting shifts in the country's macroeconomic outlook.
Banxico now projects gross domestic product growth of 1.5% for 2026, up from its prior estimate of 1.1%. The 2027 growth forecast was trimmed to 2.0% from 2.1%, indicating a more cautious near-term outlook despite the upward revision for 2026. The central bank also delayed its inflation target timeline, pushing back the expected return of headline inflation to 3% to the fourth quarter of 2027, from a previous projection of the second quarter of 2027.
Core inflation, which excludes volatile items such as energy and food, is now forecast to reach 3.5% by the fourth quarter of 2026, slightly higher than the prior estimate of 3.4%. Recent inflation data for the first half of August showed headline inflation at 3.26%, while core inflation stood at 3.93%. The central bank's decisions underscore ongoing challenges in balancing growth and price stability amid shifting economic conditions.
