Stay informed with the latest insights on Mexico's economy via statistics and AI analysis and synthesis.
Updated: 2026-04-15
TMSourcing is seeking to operate as a brokerage house, expanding its financial services. The company plans to enhance its offerings to better serve clients in the investment sector. This move reflects TMSourcing's strategy to diversify its business operations and adapt to market demands. — El Economista, 15 Apr 2026. Read more
Experts have cautioned the Mexican government against maintaining fiscal stimuli for gasoline, arguing that such measures could lead to higher long-term costs. They emphasize that while these incentives may provide short-term relief, they could ultimately result in adverse economic consequences. The warnings come amid ongoing discussions about the sustainability of current fiscal policies. — El Financiero, 15 Apr 2026. Read more
Profeco and Sader have confirmed that there will be no increase in tortilla prices in Mexico. The agencies reassured consumers amid concerns about potential price hikes, emphasizing their commitment to maintaining stable food prices. — El Financiero, 15 Apr 2026. Read more
Fitch Ratings has indicated that the ongoing conflict in the Middle East will have a significant effect on fuel prices in Mexico and other countries. The agency emphasized that this geopolitical situation is likely to lead to increased costs for consumers, reflecting broader market dynamics influenced by regional instability. — El Financiero, 14 Apr 2026. Read more
In the latest weekly auction conducted by Banxico, the rates for Cetes mostly operated lower. This trend reflects the ongoing adjustments in the financial market, as noted by Banxico Governor Victoria Rodríguez Ceja. — El Economista, 14 Apr 2026. Read more
The Mexican peso has appreciated against the US dollar, driven by optimism surrounding a potential agreement between the United States and Iran. This development reflects market sentiment and could influence future economic interactions. The article highlights the impact of geopolitical events on currency movements. — El Economista, 14 Apr 2026. Read more
Banco Nacional de Comercio Exterior is revising its operational strategy to enhance support for Mexican exporters. The bank aims to adapt to changing market conditions and improve financial services. President Claudia Sheinbaum emphasized the importance of strengthening international trade relations during the announcement. — Expansión, 12 Apr 2026. Read more
The article discusses the recent fluctuations in debt markets, highlighting the impact of rising interest rates and investor sentiment. It notes that these changes have led to a reassessment of risk among investors. Additionally, the article mentions the role of central banks in influencing market dynamics, particularly in the context of ongoing economic adjustments. — Expansión, 12 Apr 2026. Read more
Recent reports indicate that wage increases in Mexico have surpassed inflation rates. This trend reflects a significant shift in the labor market dynamics, providing workers with improved purchasing power. The article discusses the implications of these wage adjustments for the economy and consumer behavior. — Expansión, 12 Apr 2026. Read more
Nu has once again reduced the yields offered to savers, prompting discussions about the viability of seeking alternative investment options. The decision reflects ongoing challenges in the financial landscape, leading to concerns among savers regarding the adequacy of returns on their deposits. — El Economista, 09 Apr 2026. Read more
Sheinbaum vows to ‘defend Mexicans at every level’ amid anger at Trump over migrant deaths — The Guardian, 15 Apr 2026. Read more
IMF raises its 2026 GDP forecast for Mexico to 1.6% — Google News, 14 Apr 2026. Read more
U.S.-Mexico trade hits $73B in February as border capacity tightens — Google News, 14 Apr 2026. Read more
MEXICO PUSHES POLICY TO CONTROL ENERGY PRICES AS WAR IN IRAN CONTINUES TO STRANGLE GLOBAL ECONOMY — Google News, 14 Apr 2026. Read more
Texas–Mexico Energy Trade: Local and Global Impacts — Google News, 14 Apr 2026. Read more
U.S., Mexico, Canada ministers to sign trade pact Nov. 30, official says — Google News, 14 Apr 2026. Read more
Mexico FDI ranking jumps in 2026 as nearshoring boosts investment — Yahoo Finance, 13 Apr 2026. Read more
Updated: 2026-03-28 by Pablo Rivas
Key Takeaways
Following the March 26, 2026 decision, Banxico's policy rate stands at 6.75% after a recent cut of 0.25%. After Banxico's March 26 meeting, the target rate was adjusted downwards to 6.75%. This recent cut represents the first adjustment in a series of meetings where the rate had remained steady for nearly three years. Economists are closely watching how this decision fits into the broader context of declining inflation and ongoing economic uncertainties as the central bank gears up for its next decision on May 7.
Relative to the United States, the Fed's target rate currently sits at 3.62%, creating a rate differential of 3.13%. The Fed's target rate remains at 3.62%, significantly lower than Banxico's 6.75%. This divergence comes as the Fed has held steady since its last cut, reflecting different economic conditions and policy priorities. The first-mover advantage has consistently favored the Fed, influencing capital flows and positioning Banxico in a challenging spot as it considers future adjustments.
The rate differential creates a complex landscape for capital flows and currency pressures. The rate differential at 3.13% suggests a potential draw for foreign capital, yet it also amplifies pressures on the peso amid ongoing economic policy uncertainty. For markets, the implications of this differential may lead to increased volatility as investor sentiment shifts between seeking higher returns and managing risks tied to security and law enforcement issues in Mexico.
The central bank's policy rate is the primary tool for steering inflation and economic activity. Banxico targets 3% annual inflation and adjusts its overnight interbank rate to influence borrowing costs throughout the economy. The rate differential with the United States affects capital flows and exchange rate dynamics — a wider spread can attract foreign investment but may constrain domestic credit. Policy decisions are announced roughly every six weeks following scheduled monetary policy meetings.
Updated: 2026-04-15 by Pablo Rivas
Key Takeaways
With the latest economic indicators pointing toward a significant hold, Banxico is treading carefully ahead of its next meeting. Following updates to the economic landscape, our model-based expectations indicate a substantial chance of no action at the upcoming Banxico meeting on May 7, with about 58% probability leaning towards a hold. This comes as the expected move swings from a modest cut to a neutral position, reflecting growing economic policy uncertainty. The modal bucket now sits at ±0bp, while a notable 39% of the model suggests a -25bp adjustment could still be on the table. Overall, the market is digesting the committee's cautious stance amid a complex backdrop, which could lead to a wait-and-see approach.
Recent data updates have contributed to a nuanced view of the economic environment. Since our last update, new observations have come in, particularly around consumer confidence and inflation dynamics. While inflation remains a critical concern, recent figures indicate a slight decline in consumer confidence, further complicating the decision-making landscape for Banxico.
As we assess the key drivers, it's clear that a blend of factors is influencing the policy outlook. The model identifies a moderate dovish pull from declining consumer confidence, while economic policy uncertainty continues to loom large, exerting upward pressure on rates. Notably, geopolitical tensions and public security concerns remain significant negative drivers, casting shadows over growth and inflation forecasts. However, other drivers, such as bond yields and exchange rates, are currently exerting negligible influence. Ultimately, the decision will hinge on the committee's judgment, weighing these various pressures against the need for stability.
Ordered Probit Probabilities
| Rate Change | 04 Feb | 05 Feb 2026 | Δ |
|---|---|---|---|
| Cut | 58.4% | 42.0% | -16.4 |
| Hold | 41.6% | 58.0% | +16.4 |
| Hike | 0.0% | 0.0% | +0.0 |
| E[Δrate] | -17.5 bp | -11.3 bp | +6.2 bp |
Probabilities in %. Modal bin in bold. E[Δrate] = probability-weighted expected change in basis points.
When markets and the public can anticipate how and why the central bank acts, uncertainty falls and policy becomes more effective. Clear communication helps businesses plan investments, households make borrowing decisions, and international investors gauge currency risks. Economists often stress the importance of clarity and traceability — the ability to follow and understand decisions step by step. Without it, rate moves risk being misread, causing volatility instead of stability. With it, policy signals are more credible, anchoring expectations and strengthening the central bank's influence.
Rate-change probabilities are estimated using an ordered probit model with eight macroeconomic and financial drivers: consumer price inflation (CPI), consumer confidence, the 30-day peso/dollar change, the CETES 28-day spread, stock market growth, the yield curve slope (10Y minus 2Y), Mexico's Economic Policy Uncertainty index, and the Fed-Banxico rate differential. The model maps these drivers into probability bins for the next monetary policy decision, ranging from cuts of 50 basis points or more to hikes of the same magnitude. Coefficients are estimated on the historical record of Banxico decisions and their pre-decision data environment. Probabilities update daily as driver series refresh and should be treated as one input among many.
Out-of-sample backtest across 24 past meetings: the modal prediction matched the actual decision 46% of the time, directional accuracy (hike/hold/cut) was 67%, Brier score 0.720. Out-of-sample backtest across 24 past meetings: the modal prediction matched the actual decision 46% of the time, directional accuracy (hike/hold/cut) was 67%, Brier score 0.720. Lower Brier scores indicate better-calibrated probability forecasts.
Updated: 2026-04-15 by Pablo Rivas
Key Takeaways
Bond prices as of 2026-04-15 show the 10Y-3Y spread at 1.25% with a real spread at 0.40%, signaling a stable outlook despite recent fluctuations. The latest yield curve data reveals the 10Y-3Y nominal spread at 1.25%, reflecting a slight decline of 0.15% from the previous observation. The real spread is also modest at 0.40%, having decreased marginally, while the implied inflation spread stands at 0.85%, indicating that market participants anticipate a relatively stable inflation environment. With the nominal spread still in positive territory, it suggests that investors are not overly concerned about immediate inflation threats, but the slight uptick in the implied inflation spread over the last month hints at some underlying optimism about future price stability.
The curve shape suggests a cautious alignment with market expectations of a hold from Banxico in May, though there’s a palpable tension in the air. Markets appear to be pricing in a likely hold from Banxico at the upcoming meeting, with a 90% probability of a modest -3bp adjustment, aligning with the current yield curve dynamics. However, the curve's flattening could indicate that investors are wary of potential economic headwinds, reflecting a disconnect between optimistic market signals and the cautious policy consensus shaped by geopolitical tensions and economic uncertainties. This balancing act between easing monetary conditions and inflation risks will be crucial for policymakers as they navigate these complex waters.
Yield Spread Update
| Spread (10Y−3Y) | 13 Apr | 14 Apr 2026 | Δ | NS-DFM |
|---|---|---|---|---|
| Nominal | 1.28 | 1.25 | -0.028 | 0.90 |
| Real | 0.45 | 0.40 | -0.047 | 0.75 |
| Inflation | 0.83 | 0.85 | +0.019 | 0.15 |
All values in percentage points. NS-DFM = Nelson-Siegel Dynamic Factor Model filtered estimate.
When investors and businesses trust that monetary policy will remain credible and predictable, long-term interest rates respond more smoothly to central bank signals. Yield curve spreads between long and short maturities serve as a real-time gauge of this alignment: a stable, upward-sloping curve suggests markets expect gradual normalization, while persistent inversions often signal that markets anticipate policy shifts before they are announced. For Mexico, where inflation targeting depends on anchoring expectations across a diverse investor base, the 10-year minus 3-year spread offers a compact summary of whether policy communication is landing as intended.
Yield curve spreads are filtered using a Nelson-Siegel Dynamic Factor Model (NS-DFM) estimated on weekly data. The model ingests 16 synthetic yield curve points — 11 nominal maturities (overnight through 30 years) and 5 real maturities (overnight through 30 years) — fitted via Nelder-Mead optimization on Banxico bond prices. Factor loadings follow the Diebold-Li (2006) Nelson-Siegel parameterization, decomposing each yield curve into level, slope, and curvature components for both real rates and implied inflation. The Kalman smoother extracts filtered spread estimates that track the underlying signal in daily bond market noise.
So…what is this—and why am I doing it?
This project began with a simple question in 2021: how much of the work of producing useful economic information can we hand over to machines? Monitoring Monetary Policy in Mexico is a thought experiment at that frontier. By combining statistical analysis, tailored visualizations, and large language models, it demonstrates how even highly specialized topics—such as Mexican monetary policy—can be made more accessible, relevant, and insightful. Meanwhile, the system is designed to run without human intervention on a daily basis. My role is to set the design; the automation carries it out.
When does data stop being a dump and start being a story?
The initiative builds on my earlier Monitoring Mexico project but has since evolved in important ways. Data is no longer simply displayed; it is analyzed, distilled, forecasted, visualized, interpreted, narrated, and contextualized. Large language models help transform both raw and modeled data into context, turning numbers into stories. In short, raw information is transformed into understanding.
Who’s in charge here—a Raspberry Pi or common sense?
Behind the scenes, the site runs on a Raspberry Pi 5 powered by Python and a library of custom routines. Automation drives much of the process, but human expertise remains essential in designing the explanation and presenting the material. The balance between machine efficiency and human judgment is what makes the project work.
How do we cut through the jargon and keep the signal?
The aim is straightforward: to bring clarity to an area often obscured by technical detail. Monetary policy shapes households, firms, and markets, yet its analysis usually remains confined to experts. By filtering, explaining, and visualizing the data, this project seeks to make that knowledge more transparent and more useful.
Is this the 80/20 rule you learn in business school in the wild?
At its core, the site is both a contribution to public understanding and an exploration of how informational value is created. It is a humble attempt to deliver 80% of the insights of a central bank analysis with 20% of the resources—while also testing what the future of knowledge generation might look like.
What might be new the next time you drop by?
This is very much a work in progress, with new features, analyses, and visualizations added over time. We can now at the brink of generating our very own economic policy uncertainty (EPU) index, and we consider a newsletter. But maybe a chatbot might be more appropriate? Coming back to check for updates is always a good idea. If the site sparks curiosity, fosters dialogue, or simply helps illuminate Mexico’s economic dynamics, it has achieved its goal.
Updated: 2026-04-11 by Ignacio Crane
Key Takeaways
The early-April 2026 CPI release shows headline inflation at 4.38%, firmly above Banxico's 2%-4% target band. The early-April 2026 CPI release shows headline inflation at 4.38%, positioning it within the 58th percentile of historical observations. This marks a modest decline of 0.13% compared to the previous release, indicating a slight easing in cost pressures. However, the current rate remains considerably above the central bank's target, necessitating vigilance from policymakers as they weigh potential adjustments to the policy rate in light of ongoing inflationary dynamics.
Core inflation, which excludes volatile food and energy prices, presents a more nuanced picture. Core inflation, which excludes volatile components, stands at 4.51%, indicating a persistent elevation above the target and a divergence from the headline figure. The latest change reflects a marginal decrease of 0.01% from the prior period, suggesting that underlying inflationary pressures continue to be robust. This sustained elevation in core inflation underscores the challenges facing Banxico as it seeks to navigate a path toward price stability while managing broader economic uncertainties.
Trade prices are also signaling notable inflationary trends, particularly in export prices. Trade prices, particularly export indices, have seen an increase, with export price inflation currently at 7.05%, reflecting significant upward pressure from global market conditions. This 1.15% rise compared to the previous month highlights the interconnectedness of domestic inflation trends with international price movements. Such developments may further complicate the monetary policy landscape, as Banxico must contend with the implications of external price shocks on domestic inflationary pressures.
| 2H Mar 2026 | 2H Mar 2027 | |||||
|---|---|---|---|---|---|---|
| Series | Current | Prev. Fcast | Error | 12M Fcast | Prev. 12M | Rev. |
| Headline CPI | 4.4 | — | — | 4.4 | 4.4 | +0.00 |
| Core CPI | 4.5 | — | — | 4.1 | 4.1 | +0.00 |
| Export Price Index | — | — | — | 5.1 | 5.1 | +0.00 |
| Import Price Index | — | — | — | 3.6 | 3.6 | +0.00 |
All values in percentage points (YoY, seasonally adjusted). "Error" = actual minus previous forecast. "Revision" = change in 12-month outlook since last update. "—" = no prior forecast available.
The Consumer Price Index (CPI) measures changes in the cost of a representative basket of goods and services purchased by Mexican households. Banxico targets 3% annual inflation with a tolerance band of 2%-4%. Core CPI — which excludes volatile food and energy prices — reveals underlying inflation trends that guide monetary policy. Import and export price indices extend the picture by linking Mexico's inflation dynamics to global markets, trade flows, and currency movements.
Headline CPI, core CPI, export prices, and import prices are projected six months ahead using a Vector Autoregression (VAR). The four series are estimated jointly, so each informs the others' forecasts through lagged interactions. Projections update each time new CPI data arrive and may shift materially after revisions.
Out-of-sample backtest over 65 evaluation windows using the Vector Autoregression (VAR). Out-of-sample backtest over 65 evaluation windows using the Vector Autoregression (VAR). RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. Headline CPI (RMSE 1.12 vs 1.06 naive, n=65); Core CPI (RMSE 0.67 vs 1.10 naive, +39% improvement, n=65); Export Price Inflation (RMSE 7.27 vs 7.77 naive, +6% improvement, n=56); Import Price Inflation (RMSE 2.99 vs 2.05 naive, n=56).
Updated: 2026-03-27 by Alexander Dentler
Key Takeaways
The latest update on the SHF House Price Index reveals that house price inflation reached 8.92% YoY as of October 1, 2025, reflecting a continuing trend of rising prices over the past three quarters. This inflation rate stands above the historical average, which has ranged from 2.0% to 11.7%, positioning it in the 80th percentile since 2006. Notably, house price inflation exceeds both headline CPI at 4.02% and housing CPI at 3.44%, highlighting a significant premium of 4.90 percentage points over the former and 5.49 percentage points over the latter. This divergence suggests a robust demand in the housing market that may not be fully captured by broader inflation metrics, although the recent DFM nowcast hints at potential downward pressure.
The Dynamic Factor Model (DFM) nowcast indicates a contrasting picture, with a current estimate of 7.72% YoY as of February 1, 2026, trailing the observed inflation by 1.20 percentage points. This divergence implies that auxiliary indicators, particularly mortgage lending trends and housing CPI components, are exerting downward pressure on the underlying trend. The model suggests that while house prices have been rising, there may be emerging signs of mean reversion, prompting a cautious stance on future price increases. Policymakers and market participants should consider this nuanced interplay when assessing the housing market's outlook.
DFM Nowcast Comparison
| Observed | Nowcast | Prev. Nowcast | Gap | Revision | |
|---|---|---|---|---|---|
| SHF House Price Inflation (YoY) | 8.92% | 7.72% | 7.72% | -1.20 | +0.00 |
Observed: 2025-Q4. Nowcast: 2026-02. Previous nowcast: 2026-02. "Gap" = nowcast − observed. "Revision" = change in nowcast since previous run.
The SHF House Price Index is published quarterly by Sociedad Hipotecaria Federal, Mexico's federal mortgage development bank, typically around 40 days after the reference quarter ends. It is constructed from mortgage appraisal data (avalúos) using a Case-Shiller repeat-sales methodology, with breakdowns by state, new vs. used housing, and market segment (affordable vs. mid-to-high-end). Because the index reflects prices at the point of mortgage origination, it captures credit-driven demand rather than asking prices, making it a tighter gauge of actual transaction values and collateral quality across the housing market.
A Dynamic Factor Model (DFM) filters the quarterly SHF House Price Index using five Banxico auxiliary series — the funding rate, mortgage lending volumes, a housing purchase survey indicator, the SPF unemployment forecast, and construction activity — plus two CPI components (headline and housing subcategory). The model extracts a common factor from these seven indicators, producing a smoothed nowcast that updates between quarterly SHF releases whenever auxiliary data arrive. This filtered estimate helps distinguish persistent trends from quarterly noise in the observed house price series.
Out-of-sample backtest over 12 evaluation windows using the Dynamic Factor Model (DFM). Out-of-sample backtest over 12 evaluation windows using the Dynamic Factor Model (DFM). RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. House Price Nowcast (RMSE 1.32 vs 0.66 naive, n=12).
Updated: 2026-03-25 by Pablo Rivas
Key Takeaways
Brent oil prices updated through February 2026 indicate a modest rebound but remain under pressure. Brent oil prices, now at $69.41 as of February 2026, are down 7.7% year-over-year. Despite a recent uptick of 7.5% month-on-month, the overall momentum suggests a cautious market. This is particularly relevant for Mexico, where oil is a crucial revenue driver for Pemex and federal finances.
Copper prices continue to soar, reflecting strong industrial demand amidst global recovery. Currently priced at $12,951.34 as of February 2026, copper has skyrocketed 38.8% year-over-year. Although recent momentum shows a slight decline of 0.3% month-on-month, the overall trend remains robust. This surge is significant for Mexico's mining sector, especially in Sonora, which dominates national production.
Corn prices are stabilizing after recent fluctuations, highlighting ongoing challenges in the agricultural sector. Corn is priced at $210.64 as of February 2026, reflecting a 4.8% decline year-over-year. The price has increased by 3.3% month-on-month, indicating a possible recovery. For Mexico, where corn is a staple and a key aspect of food security, these shifts directly impact smallholder farmers and tortilla prices.
Commodity prices feed directly into Mexico's inflation pulse and terms of trade. Oil and corn affect energy and food costs, while copper is a proxy for global industrial demand. For policymakers, sharp commodity swings can shift inflation expectations and fiscal balances, making these prices critical to monitor.
Updated: 2026-04-10 by Ignacio Crane
Key Takeaways
The March 2026 IMSS release shows unit labor costs at 2.27%, reflecting a rising trend as wages outpace productivity. Following March's formal sector wage data, ULC in manufacturing is rising, indicating that wage growth is exceeding productivity gains. At 2.27%, this figure resides in the 62nd percentile, having decreased by 0.49 from the previous month. This persistent upward pressure on unit labor costs suggests potential cost-push inflationary risks that could affect overall competitiveness in the manufacturing sector.
Real wages in the formal sector are showing positive growth, signaling an improvement in purchasing power for households. Manufacturing real wages stand at 2.27%, reflecting a modest decline of 2.87 compared to the previous month, while still indicating that purchasing power is on the rise. This positive trajectory, although slightly diminished, suggests that households are experiencing a net gain in their financial wellbeing, which could bolster consumer spending in the near term.
Across sectors, manufacturing and retail diverge sharply in real wage growth, with retail outperforming manufacturing significantly. Retail real wages have reached 4.09%, in stark contrast to manufacturing's 2.27%, highlighting the greater financial resilience of households employed in the retail sector. This disparity underscores the sector-specific dynamics at play, where the retail environment is currently providing more robust wage support than manufacturing, which continues to face headwinds.
SARIMAX Forecast Comparison
| Series | Current | Prev. Forecast | Error | 12M Forecast | Prev. 12M | Revision |
|---|---|---|---|---|---|---|
| ULC Manufacturing | — | — | — | 2.3 | 2.3 | +0.00 |
| ULC Retail | — | — | — | 2.9 | 2.9 | +0.00 |
| Real Wage Mfg | — | — | — | 1.7 | 1.7 | +0.00 |
| Real Wage Retail | — | — | — | 4.0 | 4.0 | +0.00 |
All values in % (MoM, seasonally adjusted). "Error" = actual − previous forecast. "Revision" = change in 12-month outlook. "—" = no prior forecast available.
Unit labor costs (ULC) measure the average cost of labor per unit of output — when wages grow faster than productivity, ULC rises, potentially squeezing profit margins and fueling inflation. In Mexico, where the formal sector employs roughly half the workforce, IMSS-registered wage data captures trends in the formal economy but misses the informal sector's dynamics. Real wages — nominal wages adjusted for inflation — determine household purchasing power and underpin consumer demand. For policymakers, these indicators help balance inflation control, competitiveness, and the economic welfare of Mexican workers.
Twelve-month-ahead forecasts for unit labor costs and real wages in manufacturing and retail are produced using a Seasonal Autoregressive Integrated Moving Average with eXogenous inputs (SARIMAX) model. The model is estimated on seasonally adjusted month-over-month percentage changes, with all four series — ULC manufacturing, ULC retail, real wage manufacturing, and real wage retail — entering as joint endogenous variables. No external auxiliary data feed the forecast; the model relies solely on the internal dynamics and cross-series interactions of the wage and productivity data. Forecast confidence intervals widen over the projection horizon.
Out-of-sample backtest over 24 evaluation windows using the SARIMAX. Out-of-sample backtest over 24 evaluation windows using the SARIMAX. RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. ULC Manufacturing (RMSE 2.97 vs 3.21 naive, +7% improvement, n=24); ULC Retail (RMSE 5.33 vs 5.22 naive, n=23); Real Wage Manufacturing (RMSE 2.20 vs 2.62 naive, +16% improvement, n=24); Real Wage Retail (RMSE 3.05 vs 2.97 naive, n=23).
Updated: 2026-03-21 by María López
Key Takeaways
Following the latest quarterly GDP release from INEGI, real GDP growth in Mexico has surged to an impressive 8.81%, reflecting a significant increase of 6.51 percentage points from previous estimates. The nowcast estimate, updated with the latest data, shows that real GDP growth has leapt to 8.81% for Q4 2025, marking a notable change of +6.51pp from previous projections. This explosive growth rate highlights the dynamic recovery occurring within the economy, setting a positive tone for future economic discussions and policy deliberations.
Private consumption continues to play a pivotal role in this economic momentum, reaching a staggering growth rate of 10.48%. Household spending is clearly supporting overall activity, significantly outpacing GDP growth. This surge in private consumption signals strong domestic demand, which is essential for sustaining the recovery and potentially alleviating some of the pressures from external factors.
Exports, however, tell a different story, with growth currently at -1.01%, reflecting a substantial decline of 6.22 percentage points. This downturn in export activity indicates weakening external demand, a concerning signal for an economy that heavily relies on trade, especially with key partners. It raises alarms about competitiveness and the potential impact on sectors tied to global markets, which could dampen growth if the trend continues.
On the flip side, imports are showing a robust growth rate of 7.47%, up by 2.10 percentage points from previous estimates. Domestic absorption is clearly on the rise, suggesting that businesses and consumers are optimistic and willing to invest in goods from abroad. This trend can bolster local economic activity, despite the underlying challenges posed by sluggish export performance.
DFM GDP Nowcasts
| Component | Last Obs. (Q4 2025) | Nowcast (Q4 2025) | Prev. Nowcast | Revision |
|---|---|---|---|---|
| Real Gross Domestic Product | 9.60% | 8.81% | 8.81% | +0.00 |
| Private Consumption | 5.88% | 10.48% | 10.48% | +0.00 |
| Imports | 28.72% | 7.47% | 7.47% | +0.00 |
| Exports | -1.01% | -1.01% | -1.01% | +0.00 |
QoQ annualized, seasonally adjusted. Nowcast = DFM filtered estimate using higher-frequency inputs. "Revision" = change from previous run.
Real activity data tracks the economy's engine — output, spending, and trade — while nowcasts bridge the lag between releases. Real GDP captures total production; private consumption reflects household demand; exports and imports reveal external demand and the flow of inputs for Mexico's trade-exposed, manufacturing-heavy economy. Shifts in U.S. demand, global prices, and the peso often show up first in trade, then filter into GDP and consumption. Because official series arrive with delays and revisions, model-based nowcasts provide an early, probabilistic read for policy timing — useful if treated with uncertainty bands and cross-checked against higher-frequency signals.
A Dynamic Factor Model (DFM) nowcasts quarterly GDP and its demand components — private consumption, imports, and exports — using 14 higher-frequency inputs. These include monthly employment indicators, industrial production (IGAE), consumer confidence, capacity utilization, retail sales, and private consumption, plus quarterly GDP sector breakdowns. The model extracts common factors via the Kalman filter, updating the nowcast each time any input series receives new data. Nowcast estimates are conditional expectations that narrow as more data arrive within each quarter.
Out-of-sample backtest over 12 evaluation windows using the Dynamic Factor Model (DFM). Out-of-sample backtest over 12 evaluation windows using the Dynamic Factor Model (DFM). RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. Real GDP (RMSE 3.90 vs 3.82 naive, n=12); Private Consumption (RMSE 5.41 vs 2.51 naive, n=12); Exports (RMSE 22.26 vs 18.28 naive, n=12); Imports (RMSE 11.34 vs 17.09 naive, +34% improvement, n=12).
Updated: 2026-04-14 by Pablo Rivas
Key Takeaways
The latest ENOE survey shows unemployment at a low 3.31%, signaling ongoing labor market resilience despite economic headwinds. The April 2026 ENOE survey reveals unemployment at 3.31%, placing it around the 2nd percentile historically. This marks a decrease of 0.131% from the previous month, continuing a trend of low unemployment rates over the past three years. The stability in this figure suggests that the labor market is holding strong, even as economic uncertainties loom on the horizon.
By gender, male unemployment edges higher while female rates remain stable. Male and female unemployment rates present a mixed picture, with men facing a rate of 3.51%—a slight increase of 0.162% from last month—while women see a more stable 3.62%. This divergence hints at underlying sectoral shifts, with males potentially facing greater challenges in the current economic climate.
The share of informal workers remains alarmingly high, reflecting ongoing vulnerabilities in the labor market. Informal employment stands at 55.9%, which is around the 98th percentile historically and has risen by 0.353% from last month. This uptick in informality signals persistent challenges in the formal job market, suggesting that while unemployment remains low, many workers are still not benefiting from the security and benefits of formal employment.
DFM Employment Nowcasts
| Indicator | Last Obs. (Q4 2025) | Nowcast (Q4 2025) | Prev. Nowcast | Revision |
|---|---|---|---|---|
| Unemployment Rate | 2.55% | 3.31% | — | — |
| Underemployment Rate | 10.42% | 12.20% | — | — |
| Male Unemployment | 2.50% | 3.51% | — | — |
| Female Unemployment | 2.61% | 3.62% | — | — |
Observed = latest quarterly ENOE value. Nowcast = DFM filtered estimate using monthly auxiliary data. "Revision" = change from previous run.
Labor slack and its composition shape inflation pressure, policy timing, and social risk. Unemployment, underemployment, and unemployment by gender reveal how broad and uneven slack is. In Mexico's large informal sector, the informal employment share can swing sharply — often contracting faster in downturns as unprotected jobs are cut first, then rebounding early — masking true slack if headline unemployment alone is tracked. Tracking these dimensions helps distinguish cyclical slack from structural mismatches and calibrate monetary policy accordingly.
Between quarterly ENOE survey releases, a Dynamic Factor Model (DFM) nowcasts employment indicators using higher-frequency auxiliary data. The model ingests monthly series — industrial production, consumer confidence, capacity utilization, retail sales, and private consumption — alongside quarterly GDP components to extract common factors that track the business cycle. When any auxiliary series receives new data, the Kalman filter updates the nowcast, providing an early signal before the next official employment release.
Out-of-sample backtest over 17 evaluation windows using the Dynamic Factor Model (DFM). Out-of-sample backtest over 17 evaluation windows using the Dynamic Factor Model (DFM). RMSE measures the typical forecast error in the same units as the series; 'naive' is a no-change benchmark. Unemployment (RMSE 0.51 vs 0.13 naive, n=14); Underemployment (RMSE 1.26 vs 0.50 naive, n=11); Male Unemployment (RMSE 0.44 vs 0.26 naive, n=11); Female Unemployment (RMSE 0.44 vs 0.28 naive, n=11).
Updated: 2026-04-14 by Pablo Rivas
Key Takeaways
INEGI's Q1 2026 productivity release shows secondary sector output at 101, reflecting a modest rise but still indicating underlying volatility. The latest INEGI productivity data for Q1 2026, released in April, reveals secondary sector output at 101, a 0.398% increase from the previous month. This growth is driven primarily by the construction sector, which remains robust, while mining and energy continue to lag behind. Notably, the rise in productivity isn't broad-based; it’s concentrated in construction, underscoring the sector's critical role in the overall performance of the secondary sector.
Manufacturing composites show a concerning divergence in trends, signaling potential sustainability issues. Across the PCA indices, productivity has dipped slightly, falling by -0.223%, while sales have shown resilience with a modest increase of 0.028%. However, labor demand remains weak, reflected in a decline of -0.171%, raising flags about the sustainability of current growth patterns. This divergence suggests that while sales may hold up, the underlying labor demand could signal trouble ahead if not addressed.
Within manufacturing, the top-performing subsectors are petroleum and coal products, while the computer and electronic equipment sector is struggling. The top-performing subsectors are petroleum and coal products, which surged by 4.28%, showcasing their significant weight in the aggregate. Conversely, computer and electronic equipment has been a laggard, with a notable decline of -17.8% over the past few months. This stark contrast highlights the dependency on a few key subsectors for overall manufacturing performance, raising concerns about resilience amid broader economic uncertainties.
PCA Composite Indices
| Index | May 2025 | Jun 2025 | Δ |
|---|---|---|---|
| Productivity Index | 0.50 | 0.28 | -0.22 |
| Sales Index | 0.58 | 0.61 | +0.03 |
| Inventory Index | 0.15 | -0.03 | -0.18 |
| Labor Demand Index | -1.32 | -1.49 | -0.17 |
Standardized scores (0 = mean, ±1 = one standard deviation).
Productivity trends reveal the economy's capacity to grow without stoking inflation. In Mexico, productivity in the secondary sector — mining, energy, construction, and especially manufacturing — signals how efficiently output expands relative to inputs. Strong productivity gains mean firms can meet demand without raising prices, easing inflation pressure and supporting sustainable wage growth. Weak productivity, by contrast, constrains supply, making cost shocks more inflationary. Manufacturing deserves closer scrutiny, as its diverse subsectors respond differently to global demand, exchange rate shifts, and investment cycles. Tracking these patterns helps judge whether growth is supported by efficiency gains or reliant on credit and labor cost increases.
Four composite indices — productivity, sales, inventory, and labor demand — are constructed using Principal Component Analysis (PCA) applied to INEGI manufacturing subsector data and GDP sector composition. PCA extracts the dominant co-movement pattern across subsectors, producing standardized indices that summarize broad trends while filtering out subsector-specific noise. The productivity index draws on output-per-worker measures across manufacturing branches; the sales, inventory, and labor demand indices use INEGI's corresponding survey-based indicators supplemented by GDP sector weights.
Updated: 2026-04-08 by María López
The March 2026 consumer confidence survey shows the general index at 1.22, sitting in the 88th percentile but down from last month. INEGI's latest March release reveals confidence at 1.22, which, while still elevated in the 88th percentile, has slipped by 0.07% from the previous month. This decline underscores a growing unease among consumers as they navigate turbulent economic waters. Notably, the housing-specific index has shown resilience, inching up to 0.83, suggesting that buyers are still optimistic about real estate despite the broader decline in consumer confidence. This sector's strength contrasts sharply with the durable goods index, which has taken a significant hit, falling by 0.67% and reflecting a more pessimistic outlook on spending in that category.
PCA Confidence Indices
| Index | Feb 2026 | Mar 2026 | Δ |
|---|---|---|---|
| General Sentiment | 1.28 | 1.22 | -0.07 |
| Housing Appetite | 0.75 | 0.83 | +0.08 |
| Durables Appetite | 1.50 | 0.83 | -0.67 |
Values are z-scores (0 = historical mean, ±1 = one standard deviation).
The ENCO (Encuesta Nacional sobre Confianza del Consumidor) is conducted jointly by INEGI and Banco de México. Roughly 2,300 households across 32 major cities are interviewed during the first 20 days of each reference month, and results are published around the 5th of the following month. The survey uses a rotating panel design — each household stays in sample for four consecutive months, rests for eight, then returns for four more — which smooths out idiosyncratic response noise while capturing genuine shifts in sentiment. Because confidence data arrive before most hard activity indicators for the same month, they provide an early read on whether household demand is strengthening or cooling.
Three composite confidence indices — general sentiment, housing appetite, and durables appetite — are extracted from the eight raw INEGI survey questions using Principal Component Analysis (PCA). PCA identifies the common variation within each question group, producing a single index that captures the dominant signal while filtering out question-specific noise. The general index draws on six broad economic outlook questions; the housing and durables indices each isolate spending appetite in categories most sensitive to interest rates and household balance sheets.
COMING SOON...
Updated: 2026-04-02 by Ignacio Crane
Key Takeaways
The March 2026 SPF survey reveals a modest increase in the Aggregate Concern Index, signaling heightened economic unease. The March 2026 SPF survey shows the aggregate Concern Index at 2.82, placing it in the 64th percentile historically. This marks a stable month-over-month change, reflecting a nuanced sentiment among forecasters. The index's slight rise of 0.0032 indicates a growing awareness of underlying economic challenges, despite overall stability in the immediate outlook.
Economists have identified public insecurity and trade policy as significant growth constraints, underscoring systemic vulnerabilities. The key constraints currently cited include public insecurity at 9.7%, U.S. trade policy at 6.6%, and a lack of structural change at 5.0%. Notably, public insecurity has experienced the largest month-over-month decline, suggesting that while the issue remains pressing, there may be a slight easing in sentiment. This dynamic highlights the ongoing interplay between socio-political factors and economic performance.
The perceived probability of recession remains elevated, reflecting a cautious outlook among economists. The perceived probability of recession stands at 35.0%, placing it in the 89th percentile compared to historical norms. This elevated assessment relative to past data indicates significant concern regarding economic stability. Looking ahead, the probability for the next quarter is projected at 22.0%, suggesting a moderate outlook but still indicative of underlying risks.
FX expectations suggest a consistent undervaluation of the peso, aligning with forecasters' beliefs about its strength. According to forecasters, the current month's misalignment indicates that the peso is perceived as undervalued by 0.069. This sentiment has persisted across near-term horizons, reflecting a broader expectation of a stronger peso than previously anticipated. Such perceptions may influence investment decisions and currency strategies in the coming months.
Banxico's Survey of Professional Forecasters (Encuesta sobre las Expectativas de los Especialistas en Economía del Sector Privado) polls roughly 40 groups of analysts from banks, financial institutions, consultancies, and research centers. Responses are collected during the second half of each reference month — typically between the 15th and 28th — and results are published on the first business day of the following month. Because respondents form their expectations before some end-of-month official data releases, the survey provides an early window into shifting professional sentiment on inflation, growth constraints, recession risk, and exchange rates, making it a valuable leading indicator for policymakers and market participants.
Updated: 2026-04-15 by Pablo Rivas
Key Takeaways
Mexican equity markets as of April 15, 2026, show excess returns at 0.2107, reflecting a cautious optimism despite recent volatility revisions. With market data through April 15, 2026, and recent updates reflecting a risk-return revision down to 0.03, the environment remains complex. Realized volatility stands at 0.0093, signaling a slight uptick in market fluctuations. The recent adjustments, particularly in the Amihud illiquidity measure, indicate that while markets are behaving relatively stable, underlying tensions are mounting. Overall, investors are navigating an atmosphere where geopolitical factors loom large, creating a delicate balance between risk and opportunity.
The decomposition shows that recent volatility has been driven primarily by US policy shocks and persistent economic uncertainty. Top contributors to this month’s volatility include elevated risks stemming from global economic shifts and local policy dynamics. As the dust settles from the latest updates, it's evident that uncertainty around economic policy and public security remains a dominant theme. This duality of influences suggests that while the immediate market response may appear muted, the underlying currents are anything but calm.
Investor sentiment reflects a growing alarm, particularly regarding public security and economic policy uncertainty. The latest readings indicate that policy uncertainty levels are creeping higher, which is resonating through market discussions and investor psychology. As concerns about public safety and governance take center stage in both economic circles and on social media, the composite picture shows a market grappling with apprehension and caution. This heightened uncertainty underscores the challenges that policymakers face as they navigate the tightrope between easing measures and inflationary pressures.
Volatility Measures
| Measure | Mar 2026 | Apr 2026 | Δ | Top Driver |
|---|---|---|---|---|
| Excess Return | -0.2169 | 0.0342 | +0.2511 | US Policy Shocks (+0.153) |
| Realized Volatility | 0.0122 | 0.0100 | -0.0022 | Investor Sentiment (-0.001) |
| Illiquidity (Amihud) | 147.1455 | 125.2191 | -21.9263 | Investor Sentiment (-19.446) |
Monthly averages. Top Driver = largest OLS category contribution to latest value.
Financial market returns, volatility, and liquidity signal investor sentiment and risk appetite. Excess returns over government bonds capture the risk premium investors demand for holding equities; wider spreads suggest higher perceived risk or stronger growth prospects. Realized volatility in a stock market index reflects uncertainty — sharp swings indicate fragile sentiment and raise the cost of capital. Illiquidity shows how trading volume and price impact interact: when liquidity dries up, small trades can move prices disproportionately, amplifying shocks. For monetary policy, these indicators matter because they shape funding costs, investment flows, and the broader transmission of rate decisions into financial conditions.
Volatility drivers are analyzed in two steps. First, Principal Component Analysis (PCA) groups the six SPF concern categories and investor sentiment indicators (AAII bull-bear spread, NAAIM exposure index) into thematic driver clusters that capture common variation. Second, an OLS regression decomposes recent volatility movements into contributions from each driver cluster, quantifying how much of the observed excess return and realized volatility is attributable to policy uncertainty, external sentiment, and domestic macro conditions. The decomposition is descriptive — it identifies contemporaneous associations, not causal effects.
Updated: 2026-04-15 by Pablo Rivas
Key Takeaways
Banxico's April 2026 credit release shows money market spreads tightening as uncertainty looms. Following the latest April lending data, rate premia have tightened significantly, with money market spreads now standing at 0.181. This marks a notable narrowing of -0.107 from the previous month, highlighting a trend of decreasing spreads that has persisted over the past three months. As funding costs ease, this could signal a potential for more affordable lending conditions, though the backdrop of economic uncertainty remains a critical factor for decision-makers.
Household mortgage rates are holding steady at elevated levels, adding strain on potential homebuyers. The total annual cost of mortgages (CAT) averages 13.9%, with a range between 10.7% and 28.2%. While the tight monetary environment has kept mortgage costs high, the pass-through of policy rates to consumers remains in focus as affordability concerns grow amid stagnant economic conditions. With the policy rate likely to hold steady in the coming months, housing market dynamics could shift significantly as buyers reassess their capacities.
Debt issuance patterns reveal a cautious approach among firms, with a notable preference for fixed-rate financing. Corporate financing trends show a strong inclination towards fixed-rate instruments, which now constitute 18.74% of total debt issuance. This shift may reflect firms' strategies to lock in favorable rates amid volatile market conditions, while the share of variable rates remains comparatively lower at 19.92%. As firms navigate these uncertain waters, their financing choices could significantly influence overall economic stability.
Rate premia show how market and bank funding costs move relative to the policy rate, indicating the efficiency of monetary transmission. Household mortgage rates capture the cost of long-term borrowing — their sharp rise in recent years signals affordability pressures and distributional effects, as many families face double-digit costs. Debt issuance patterns, normalized by GDP, reveal how firms finance themselves; the balance between fixed and variable rates matters for vulnerability to policy shifts. Together, these indicators show how policy rates filter into real borrowing conditions, affecting credit demand, investment, and ultimately growth and inflation dynamics.
