Mexico inflation likely eased to its lowest level in more than six years during July as lower food prices helped offset seasonal increases in tourism-related costs. Economists expect the slowdown to bring inflation closer to the central bank’s official target while strengthening expectations that policymakers will keep interest rates unchanged.
The latest inflation figures come just before the Bank of Mexico, known as Banxico, announces its monetary policy decision.
Mexico Inflation Expected to Reach Six-Year Low
A Reuters survey of 18 economists predicts annual headline inflation slowed to 3.12% in July.
If confirmed, this would mark the lowest inflation rate since May 2020 and the fourth straight month of declining annual inflation.
Analysts also expect consumer prices to increase by only 0.03% compared with the previous month.
Core Inflation Also Continues to Ease
Core inflation, which excludes volatile food and energy prices, is expected to fall to 3.94%.
That would represent its lowest reading since April 2025.
Monthly core inflation is forecast to rise by 0.22%, reflecting moderate increases in prices for goods and services.
Banxico Likely to Hold Interest Rates
Economists widely expect Banxico to leave its benchmark interest rate unchanged.
The central bank paused its rate-cutting cycle in June, and analysts believe policymakers will continue monitoring inflation before making further adjustments.
A stable inflation outlook gives Banxico more flexibility, but officials remain cautious about future risks.
Food Prices Help Offset Higher Travel Costs
Lower food prices played a major role in slowing inflation during July.
At the same time, seasonal demand pushed up tourism-related expenses, including hotel accommodation and travel services.
Despite those increases, overall price growth remained relatively contained.
Economists Warn About Future Inflation Risks
Some economists believe inflation could increase later this year.
Pantheon Macroeconomics economist Andres Abadia said the disinflation process remains on track, although rising service-sector prices continue to require careful monitoring.
Meanwhile, Barclays analysts warned that food prices may rebound toward the end of the year. They also noted that future minimum wage increases could keep service inflation elevated.
Mexico’s national statistics agency INEGI is scheduled to release the official July inflation report on Friday.
