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Banxico raises 2026 growth forecast and pushes inflation target to late 2027

Banxico also cited weaker economic activity linked to uncertainty around the USMCA trade agreement review.

Reported · Written up by our desk · Central Banks

Bank of Mexico (Banxico) revised its outlook in its Quarterly Report for Q2 2026, lifting its 2026 growth forecast from 1.1% to 1.5%, while delaying the return of inflation to its 3% goal. The central bank pushed the inflation convergence timeline from the second quarter of 2027 to the last quarter of the same year, according to FXStreet.

Banxico also raised its core inflation expectation, forecasting the CPI to rise from 3.4% to 3.5% in the fourth quarter, while extending its path back to target. The bank said economic activity is showing signs of weakness, attributing this to uncertainty around the review of the USMCA trade agreement.

The report reiterated that Banxico’s mandate centers on preserving the value of the Mexican peso and maintaining inflation near its 3% target within a 2% to 4% tolerance band. Banxico’s policy tool is setting interest rates, and the article notes that higher rates tend to support MXN through higher yields relative to the US Federal Reserve.

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