Higher forecasts follow two quarters of expansion
Citi's survey, released Wednesday, showed the larger revision: respondents raised their median growth estimate for 2026 from 1.4% to 1.8%. Forecasts from the 36 participating banks, brokerages and research organizations ranged from 0.9% to 2.1%.
In Banxico's late-October poll, the median forecast increased from September's 1.4% to 1.5%. That survey drew responses from economists and analysts at 40 private-sector economic research and consulting groups in Mexico and abroad.
Preliminary figures released last week by INEGI, Mexico's national statistics agency, put growth for the first nine months of 2026 at 1.9% compared with the same period in 2025. After a quarter-over-quarter contraction in the first quarter, the economy expanded 1.4% in the second. Preliminary third-quarter growth was 0.9% from the preceding quarter.
President Claudia Sheinbaum last week pointed to housing construction and public infrastructure projects as contributors to growth. She also cited electronics production, including products exported to the United States, as a source of economic momentum.
2027 estimates rise modestly
Both surveys also showed small upgrades for next year. Banxico's respondents put median 2027 growth at 1.83%, compared with 1.80% in the previous poll. Citi's median increased from 1.8% to 1.9%.
Earlier forecasts from international institutions offer additional context. In its Oct. 2, 2026, Article IV mission concluding statement, the International Monetary Fund projected growth of 1.5% this year and 1.8% in 2027. The IMF expected growth to strengthen, though external uncertainty would remain the main constraint.
The OECD's Economic Outlook, published June 3, projected a weaker 2026 expansion of 0.8%, followed by 1.8% growth in 2027, with domestic demand providing the main impetus.
The IMF also assessed Mexico's public finances in its October statement. It said the draft 2027 budget called for a slower fiscal consolidation than previously announced, with debt on an upward path in the coming years. Its projections put gross public sector debt at 62.1% of GDP in 2026 and 62.9% in 2027.
Inflation forecasts and a split rate decision
Survey respondents expect annual headline inflation to finish 2026 close to 4%. The median in Banxico's poll edged up 0.01 percentage points to 3.88%, while Citi's remained at 3.90%.
INEGI's recent readings show inflation moving higher. The annual headline rate reached 3.45% in September, its second consecutive monthly increase, then rose to 3.62% in the first half of October.
Against that backdrop, Banxico lowered its benchmark interest rate by 25 basis points to 6.25% on Thursday, Nov. 5. Just six of Citi's 36 survey respondents had anticipated a cut at the November policy meeting.
The vote was 3-2. Governor Victoria Rodríguez and deputy governors Gabriel Cuadra and Omar Mejía supported the reduction; deputy governors Galia Borja and Jonathan Heath preferred to hold the rate at 6.50%, according to Banxico's monetary policy statement.
The central bank called the cut a "one-time adjustment." It said holding the reference rate at 6.25% for an extended period would help bring inflation to its target and address external macroeconomic challenges.
Different timelines for reaching the inflation target
Banxico's Nov. 5 statement also raised its own fourth-quarter 2026 inflation projections, distinct from the private-sector survey estimates. It lifted the headline forecast from 3.5% to 3.7% and the core forecast from 3.6% to 3.7%, while retaining its expectation that headline inflation would converge to the 3% target in the fourth quarter of 2027.
The IMF's October assessment put a durable return to that target later, in early 2028. It cited persistent core price pressures and somewhat elevated inflation expectations. The OECD's June outlook projected that inflation would ease gradually to 3.2% in 2027.
Year-end peso estimates weaken
Both surveys shifted their year-end exchange-rate forecasts toward a weaker peso. Banxico's respondents forecast a median of 18.39 pesos per U.S. dollar, compared with 17.50 previously. Citi's median moved from 18.20 to 18.50.
Banxico reported a closing rate of 18.75 pesos per dollar on Thursday. That represented a 9.9% peso depreciation since Sept. 4, when the currency closed at 16.89, its strongest level in more than two years.
In early October, when the peso traded just below 18 per dollar, the MND Peso Index assessed it as 0.7% undervalued.
