Latam Daily: Banxico Minutes and Mexican GDP and CPI Update

Banxico has halted its easing cycle at a 6.50% policy rate amidst mixed economic signals, including a 4.11% inflation rate and a weak 0.2% y/y Q1 GDP growth. The central bank expects to maintain this rate through 2026, monitoring persistent core inflation and global geopolitical uncertainty.

Key Takeaways

• 1.Banco de México (Banxico) concluded its easing cycle in May 2026, setting the policy rate at 6.50% and signaling a likely pause for the remainder of the year.
• 2.Mexico's Q1 2026 GDP was revised slightly upward to 0.2% y/y, though it reflected a quarterly contraction of -0.8% and broad stagnation.
• 3.Inflation in early May 2026 reached 4.11% y/y, with persistent pressures in core services being offset by seasonal declines in energy and agricultural prices.

Table of Contents

• MEXICO: BANXICO SIGNALS THE EASING CYCLE CONCLUDED AT THE MAY MEETING
• IN THE FIRST HALF OF MAY, HEADLINE INFLATION STOOD AT 4.11%, WITH PRESSURES IN THE CORE COMPONENT AND MODERATION IN THE NON-CORE COMPONENT
• IN Q1 2026, GDP GREW 0.2% Y/Y, WITH MARGINAL INTERNAL MOVEMENTS
• ECONOMIC ACTIVITY INCREASED 1.4%, WITH DECLINES IN INDUSTRY AND GROWTH IN AGRICULTURE AND SERVICES IN MARCH

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