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Economy February 6, 2026

Survey Indicates Mexico's Inflation Likely Picked Up in January

Median of 12 economists sees headline and core inflation rising, reinforcing central bank's halt to easing

By Sofia Navarro
Survey Indicates Mexico's Inflation Likely Picked Up in January

A Reuters survey of economists projects an acceleration in Mexico's January inflation, with headline inflation seen at 3.82% year-on-year and core inflation at 4.49%. Analysts attribute the rise to higher food costs after tax changes and other fiscal measures. The central bank paused its easing cycle and adjusted its inflation outlook and target timeline ahead of official data due Monday.

Key Points

  • Median forecast from 12 economists expects headline inflation at 3.82% year-on-year and core inflation at 4.49% annually for January - impacts consumer goods and retail sectors.
  • Recent fiscal measures cited as inflation drivers include tax hikes on cigarettes and sugary drinks, increased tariffs on imports from mostly Asian countries without trade agreements, and a minimum wage increase - affects import-dependent industries, food producers, and labor costs.
  • Central bank paused its monetary-easing cycle and delayed its inflation target timeline to Q2 2027 while raising its 2026 year-end inflation forecast to 3.5% from 3.0% - relevant to fixed income markets and banking sector expectations.

A Reuters survey released on Friday found that Mexico's inflation likely accelerated in January, a result that supports the central bank's decision a day earlier to suspend its monetary-easing cycle as price pressures remain.

The median forecast from 12 economists in the poll indicated that headline inflation rose 3.82% year-on-year in January, while core inflation was expected to reach 4.49% on an annual basis.

Analysts cited several recent policy moves as drivers of the anticipated uptick in consumer prices. They pointed to higher food prices following tax increases on cigarettes and sugary drinks that took effect in January. In addition, Mexico raised tariffs on imports from China and other mostly Asian countries with which it lacks trade agreements, and implemented a minimum wage increase. These measures were highlighted by economists as contributing to upward pressure on prices.

The central bank on Thursday halted a lengthy sequence of monetary easing, saying the recent fiscal changes had affected inflation dynamics. While the bank paused cutting rates, it also signaled that rate reductions remain a possibility in the future.

Alongside the pause, the central bank delayed the timeline for returning inflation to its target. It moved the projected date from the third quarter of 2025 to the second quarter of 2027. The bank also revised up its year-end inflation forecast for 2026 to 3.5% from a prior estimate of 3.0%.

Market participants and policymakers will be watching official figures closely: Mexico's national statistics institute is scheduled to publish the January inflation data on Monday. That release will provide the authoritative read on whether inflation followed the pattern indicated by the economists polled.

What analysts highlighted

  • Tax-induced price increases on cigarettes and sugary drinks coinciding with January pushed up food-related inflation measures.
  • Higher tariffs on imports from certain Asian trading partners and a minimum wage rise were also cited as contributors to inflationary pressure.
  • The central bank paused its easing cycle but left open the possibility of future rate cuts, reflecting uncertainty around the inflation outlook.

Risks

  • Official January inflation data, due from the national statistics institute on Monday, could confirm persistent inflationary pressure and influence monetary policy - risk to bond yields and interest-rate-sensitive sectors.
  • Recent fiscal measures, including tariffs and tax increases, may sustain upward pressure on prices for food and imported goods, creating uncertainty for consumer-facing businesses and manufacturers reliant on imported inputs.
  • The central bank's decision to delay the inflation target timeline increases uncertainty about the pace of monetary normalization and future rate moves, which could affect credit conditions and investment planning.

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