Inflation hits its lowest year-end rate since the start of the pandemic

Inflation successful Mexico eased much than expected successful December, falling to its lowest year-end yearly complaint successful 5 years.

National statistic bureau INEGI reported connected Thursday that the yearly header complaint was 3.69% past month, down from 3.80% successful November and beneath a 3.75% statement forecast of analysts surveyed by Bloomberg.

La inflación en México hila 6 meses debajo de 4%, siendo la racha más larga desde junio del 2019 a julio del 2020, cuando la economía mexicana se encontraba en recesión. pic.twitter.com/VIEVeUNUhU

— Gabriela Siller Pagaza (@GabySillerP) January 8, 2026

The past clip Mexico’s end-of-year ostentation complaint was little was successful December 2020, erstwhile INEGI reported a 3.15% reading.

Month-over-month ostentation was 0.28% past month, the lowest December complaint since 2012.

Mexico’s halfway ostentation complaint — which doesn’t see volatile nutrient and vigor prices — was 4.33% successful December, down from 4.43% successful November.

With an yearly header speechmaking of 3.69% successful December, ostentation successful Mexico was 0.10 percent points higher astatine the extremity of the twelvemonth than successful January.

The header complaint peaked past twelvemonth astatine 4.42% successful May, portion the lowest complaint was 3.51% successful July, the commencement of a six-month streak of readings beneath 4%.

The Bank of Mexico targets 3% inflation, but tolerates a 2-4% range. Even though header ostentation remained supra its 3% people passim 2025, the cardinal slope lowered its benchmark involvement complaint aft each of its 8 monetary argumentation meetings past year.

The bank’s cardinal complaint is presently acceptable astatine 7%, down from 10% astatine the commencement of 2025.

Inflation information successful detail 

INEGI reported that prices for processed food, beverages and baccy accrued 5.22% annually successful December, portion non-food goods were 3.51% much expensive.

Services were 4.35% much costly than a twelvemonth earlier, portion nutrient prices accrued 5.76% annually.

Thanks to the easing of drought conditions successful Mexico, effect and vegetables were 5.62% cheaper past period than successful December 2024.

Central slope cuts involvement complaint to 7% citing anemic economical activity

Meanwhile, vigor prices, including those for energy and gasoline, roseate 2.19% annually successful December.

On a month-over-month basis, aerial question was 19.89% much costly successful December, which is indicative of accrued request for flights during the end-of-year vacation season.

The spike successful greenish herb prices was adjacent higher. The fruit, a cardinal constituent successful Mexico’s ubiquitous salsa verde, was 27.01% much costly past period than successful November.

Among the products whose prices fell successful December compared to the erstwhile period were papaya (-10.77%) and eggs (-4.11%).

The ostentation outlook 

The Bank of Mexico is predicting that ostentation volition converge to its 3% people successful the 3rd 4th of this twelvemonth and stay astatine that level successful the 4th fourth of 2026 and passim 2027.

However, the median forecast of 35 banks, brokerages and probe organizations polled by Citi México for its latest Expectations Survey is that Mexico’s yearly header ostentation complaint volition beryllium 4% astatine the extremity of 2026.

In a station to X connected Thursday morning, Banco Base’s manager of economical analysis, Gabriela Siller, wrote that ostentation successful Mexico could emergence supra 4% this twelvemonth owed to 4 factors:

• The summation of the minimum wage, which roseate 13% to 315 pesos (US $17.50) per time connected Jan. 1.
• The implementation of (new and higher) tariffs connected imports from countries with which Mexico doesn’t person commercialized agreements, including China.
• The summation of the IEPS excise taxation connected sugary drinks.
• The 2026 FIFA World Cup, which Mexico volition co-host with the United States and Canada successful June and July.

With reports from El Economista and La Jornada