Mexico’s April Inflation at 3.93%, Near Banxico’s Target Range

Mexico’s inflation rose to 3.93% year-over-year in April, surpassing market expectations while staying within the central bank’s target range. The data leaves the door open for another interest rate cut by Mexico’s Central Bank (Banxico) during its May 15 policy meeting.

The headline inflation figure exceeded Bloomberg's median forecast of 3.9%, climbing from 3.8% in March. Core inflation, which excludes volatile items like food and energy, also increased to 3.93%, up from 3.64% the previous month—its highest level since August 2024.

Banxico targets inflation at 3%, with a tolerance band of ±1 percentage point. The central bank has been gradually lowering interest rates and is expected to cut another 50 basis points, according to a Citi Research survey released Tuesday.

Within the core index, goods prices rose 3.38%—the highest since May 2024—while services prices climbed to 4.56%, up from 4.35% in March. The education sector recorded a 5.86% annual increase, and housing prices rose by 3.64%. Food, beverages, and tobacco within the goods category saw a 4.42% annual rise.

The non-core inflation index eased to 3.76%, down from 4.16% in March. Agricultural prices decelerated to 4.13%, while energy and government-regulated prices increased slightly to 2.99%.

Mexico's GDP grew 0.2% in 1Q25 compared to the previous quarter, narrowly avoiding a technical recession. Growth was supported by gains in the agricultural sector, which offset contractions in services and industry.

Citi analysts forecast inflation to end at 3.8% for both 2025 and 2026, with GDP growth projected at 0.1% in 2025 and 1.5% in 2026.