INSUBCONTINENT EXCLUSIVE:
late April 2025.The annual inflation rate reached 3.96% in early April, surpassing the 3.85% median forecast and the previous reading of
target range, which allows a one percentage point margin on either side
Despite inflation staying within target, economic activity is weakening.Real GDP contracted by 0.6% quarter-on-quarter in the final quarter
of 2024, contributing to a technical recession
Year-over-year growth slowed to approximately 1% in the same period, down from 2.4% in 2023 and 3.9% in 2022.Analysts project subdued GDP
growth for 2025, with estimates ranging from 0% to 1.5%, reflecting cautious expectations amid trade uncertainties
The peso strengthened slightly, supported by rate cuts, and remittances remained significant, though their growth slowed due to external
pressures.Inflation ticked up in March and April after months of stability, driven by pressures in food and energy prices
The Bank of Mexico responded by cutting its benchmark interest rate by 50 basis points to 9.0% in March 2025, following a similar cut in
February.Policymakers signaled a potential additional 50-basis-point reduction at the May meeting if inflation trends downward
The central bank aims to support the weakening economy while keeping inflation expectations anchored.This environment underscores the
challenges of balancing inflation and growth amid shifting trade conditions, including U.S
to maintain stability and investor confidence
Businesses and markets remain vigilant for further signals from policymakers.
