MEXICO CITY, June 8 - A poll conducted by Reuters of 15 analysts suggests Mexico's annual inflation rate likely slowed in May, reinforcing expectations that the central bank will keep its policy rate on hold for an extended period.
The median projection places headline inflation at 4.03% year-on-year, down from April's 4.45%. If the final reading matches that estimate, it would represent a second straight month of decline, although the rate would still be above the central bank's 3% target plus-or-minus one percentage point.
On a month-on-month basis, overall consumer prices are estimated to have decreased by 0.12%. Poll respondents attributed the monthly decline mainly to seasonal electricity subsidies implemented in some cities and lower prices for fruits and vegetables.
Core inflation, which excludes volatile items, is expected to moderate to 4.20% year-on-year from 4.26% in April. That would be the fourth consecutive monthly decline in the core measure and the lowest reading since May 2025, according to the poll. Despite the easing year-on-year, the monthly core index is forecast to increase by 0.24%, reflecting ongoing pressure in goods prices that is partially offset by discounts tied to the "Hot Sale" online shopping event.
Monetary policy developments remain central to the outlook. Mexico's central bank reduced its benchmark rate by 25 basis points to 6.50% in early May. The bank's governing board indicated it considers it appropriate to hold the rate at that level going forward. The May decision was not unanimous: deputy governors Jonathan Heath and Galia Borja preferred to leave the rate unchanged at 6.75%.
Market expectations, captured in surveys from Citi and the central bank, point to the benchmark rate staying at 6.50% through the end of 2026 and into 2027.
Official inflation figures from the national statistics agency, INEGI, are scheduled for release on Tuesday. The central bank's next monetary policy decision is set for June 25.
Contextual note - The poll results and policy positions outlined above are those reported by the surveyed analysts and central bank communications; the official inflation print will confirm the actual May readings.