Stay informed with the latest insights on Mexico's economy via statistics and AI analysis and synthesis.
Updated: 2026-04-28
Several companies are choosing to delist from the Mexican stock market, citing various challenges. The trend reflects a growing concern among businesses regarding the market's conditions and future prospects. This decision has raised questions about the overall health of the market and its attractiveness to investors. — El Economista, 28 Apr 2026. Read more
Starting May 1, the bank will lower the fees charged to gas stations for accepting card payments. This decision aims to facilitate electronic transactions and support the gas station sector. The move is part of broader efforts to enhance payment systems in the country. — El Economista, 27 Apr 2026. Read more
The Mexican peso closed stable against the dollar as markets await developments regarding the situation in the Middle East. Investors are closely monitoring geopolitical news, which could impact currency fluctuations. The stability reflects cautious sentiment among traders in light of ongoing international events. — El Economista, 27 Apr 2026. Read more
The Central Bank of Venezuela and the U.S. have contracted firms to audit Venezuelan assets held abroad. This initiative aims to provide transparency regarding the management and status of these assets. The decision reflects ongoing efforts to address concerns about the country's financial dealings on the international stage. — El Economista, 27 Apr 2026. Read more
The article discusses three essential questions to assess financial literacy and strategies for wealth accumulation. It emphasizes the importance of understanding personal finance, investment options, and the impact of financial decisions on long-term wealth. The piece aims to guide readers in improving their financial knowledge and making informed choices. — El Economista, 27 Apr 2026. Read more
Negotiations between Iran and the United States have stalled, leading to a negative impact on the peso's exchange rate. The article discusses how this impasse has created uncertainty in the market, affecting currency stability. Specific figures regarding the peso's performance were not provided. — El Financiero, 27 Apr 2026. Read more
The article discusses the mixed economic indicators for Mexico at the beginning of the year. While some sectors show signs of recovery, challenges remain, particularly in inflation and employment. Claudia Sheinbaum, the President of Mexico, emphasized the need for continued efforts to stabilize the economy. The article also highlights the role of Banxico Governor Victoria Rodríguez Ceja in addressing these economic issues. — El Financiero, 25 Apr 2026. Read more
The Mexican peso has appreciated against the US dollar as markets await updates on diplomatic dialogues in the Middle East. Analysts suggest that the currency's performance is influenced by geopolitical developments, reflecting investor sentiment and market stability. The situation remains fluid as stakeholders monitor ongoing negotiations. — El Economista, 24 Apr 2026. Read more
The Mexican peso showed strength against the US dollar, reflecting optimism regarding a potential ceasefire in Iran. The exchange rate closed favorably, indicating a positive market response to geopolitical developments. Analysts are closely monitoring the situation as it unfolds. — El Financiero, 24 Apr 2026. Read more
Wall Street experienced a decline due to losses in technology companies and growing uncertainty surrounding the conflict in Iran. Investors reacted negatively to the geopolitical tensions, impacting market performance. The article highlights the significant influence of these factors on investor sentiment and stock prices. — El Financiero, 23 Apr 2026. Read more
Mexico trade gap hides a strong March export surge — Google News, 27 Apr 2026. Read more
Banxico lowers policy rate despite war-linked inflation risks — Google News, 27 Apr 2026. Read more
What's in Trump's new trade deal with Mexico and Canada? - ABC News — Google News, 27 Apr 2026. Read more
USMCA talks with Mexico heat up while Canada relations cool — Google News, 26 Apr 2026. Read more
USMCA & The Destruction of Mexican Agriculture — Google News, 25 Apr 2026. Read more
Mexico - Trade, Exports, Imports — Google News, 25 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: 2026-04-28 by Alexander Dentler
Key Takeaways
With recent updates to economic indicators, our model-based expectations suggest a substantial chance of no action from Banxico at its next policy meeting on February 5, 2026. The current expected move indicates a slight cut of approximately 11 basis points, a shift from the prior expectation of a hold. The model points toward likely inaction, with the modal bucket now centered around ±0bp, reflecting an 58% probability of maintaining the current policy rate. This marks a significant shift from previous forecasts, where the modal bin was at -25bp, highlighting an evolving landscape of economic sentiment and uncertainty.
Recent observations in critical driver variables have introduced nuances to the outlook. Notably, consumer price index (CPI) data has remained stable, while economic policy uncertainty continues to loom large. These developments provide a mixed context for decision-making, as the committee weighs the implications of these variables on future policy actions.
Among the key drivers influencing the upcoming decision, economic policy uncertainty stands out as a significant concern, while declining consumer confidence poses a slight dovish pull. The ongoing issues surrounding public security and governance are also notable negative influences, complicating the overall economic picture. Conversely, stable bond yields contribute a moderate hawkish pressure, but the overall impact of recent developments remains somewhat negligible in this context. Ultimately, it is essential to recognize that the committee's decision will hinge on a blend of model-driven insights and qualitative judgment.
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: 2026-04-28 by Alexander Dentler
Bond prices as of 2026-04-28 show the 10Y-3Y nominal spread at 1.24%, signaling a notable increase of 0.36% from the previous observation. The latest yield curve data reveals that the nominal spread between 10-year and 3-year bonds has shifted positively, indicating a healthy risk appetite among investors. With the current nominal spread at 1.24%, it is noteworthy that this positive slope contrasts with the backdrop of economic uncertainty, hinting at a cautious optimism regarding growth and stability. The rise in the breakeven inflation spread further implies that while inflation is a concern, markets do not foresee runaway inflation, which can be interpreted as a stabilizing sentiment.
The curve shape suggests a general expectation of steady monetary policy in the near term, aligning with market pricing that indicates an 85% probability of Banxico maintaining its policy rate at the upcoming meeting. Markets appear to be pricing in stability, yet they are simultaneously acknowledging the potential for future adjustments based on evolving economic conditions. This nuanced dynamic poses a challenge for Banxico, as they must balance these market signals against the pressing issues of public safety and consumer confidence, which could ultimately sway their policy direction.
Yield Spread Update
| Spread (10Y−3Y) | 24 Apr | 27 Apr 2026 | Δ | NS-DFM |
|---|---|---|---|---|
| Nominal | 1.27 | 1.24 | -0.030 | 0.88 |
| Real | 0.49 | 0.55 | +0.060 | 0.69 |
| Inflation | 0.78 | 0.69 | -0.090 | 0.18 |
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: 2026-04-24 by María López
Key Takeaways
The mid-April 2026 CPI release shows headline inflation at 4.34%, slightly down from the previous reading of 4.50%. This latest figure positions inflation above Banxico’s target range, signaling sustained cost-of-living pressures for households. With the current rate sitting around the 58th percentile historically, it’s clear that inflation remains a significant concern. The slight decrease of 0.16% from the prior release indicates a potential easing but still leaves inflation well above the comfort zone for policymakers. The stakes are high as households grapple with rising prices, particularly in essential goods and services.
Core inflation, which excludes volatile food and energy prices, is at 4.36%, just above the headline rate and also higher than the target. This figure reflects underlying inflation pressures that are diverging from the target, albeit with a slight decline of 0.13% from last month. The core rate remains elevated, suggesting that inflation is not merely a fleeting phenomenon driven by external shocks but a more persistent issue. As this rate hovers near the 73rd percentile, it underscores the challenge for Banxico, which must balance combating inflation with addressing broader economic vulnerabilities.
Trade prices reveal a complex landscape for the economy, particularly with export prices surging to 14.31%. This substantial uptick places export prices in the 93rd percentile, reflecting strong demand and potential supply chain constraints. Import prices, while more subdued at 3.88%, still indicate rising costs that could contribute to domestic inflationary pressures. The widening gap between export and import price dynamics suggests that while some sectors may thrive, others could face increasing cost burdens, complicating the economic outlook for policymakers.
| 1H Apr 2026 | 1H Apr 2027 | |||||
|---|---|---|---|---|---|---|
| Series | Current | Prev. Fcast | Error | 12M Fcast | Prev. 12M | Rev. |
| Headline CPI | 4.3 | — | — | 4.9 | 4.9 | +0.00 |
| Core CPI | 4.4 | — | — | 4.4 | 4.4 | +0.00 |
| Export Price Index | — | — | — | 6.0 | 6.0 | +0.00 |
| Import Price Index | — | — | — | 5.3 | 5.3 | +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: 2026-04-16 by Pablo Rivas
Key Takeaways
Brent oil prices have surged to $99.41 as of March 2026, reflecting a 38.6% increase year-on-year. With Brent oil data updated to March 2026, prices now sit at $99.41, showing a notable 38.6% rise compared to last year. The momentum is clearly upward, with a monthly increase of 43.2%. This surge in oil prices is particularly relevant for Mexico, where oil is a significant export, impacting federal revenue and regional economies.
Copper prices reached $12,528.71 in March 2026, demonstrating a robust 28.7% increase from the previous year but facing recent downward pressure. Copper, as of March 2026, stands at $12,528.71, up 28.7% year-on-year. However, it’s on a downward trend recently, with a monthly decline of 3.3%. This fluctuation is crucial for Mexico's mining sector, which is heavily reliant on copper production.
Corn prices are now at $213.30 as of March 2026, reflecting a modest annual increase of 2.7%, and maintaining a stable trend. Corn prices updated to March 2026 are at $213.30, showing a small year-on-year increase of 2.7%. The trend appears stable, with only a slight monthly rise of 1.3%. Given that Mexico is a net importer of corn, these price dynamics directly influence food prices and the costs of staples like tortillas.
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: 2026-04-24 by María López
Key Takeaways
The February 2026 IMSS release shows unit labor costs at 3.66%, indicating a rise in manufacturing wages outpacing productivity growth. Following February's formal sector wage data, ULC in manufacturing is climbing, highlighting the pressure of rising wages on production efficiency. This 3.66% figure is around the 80th percentile, suggesting significant upward momentum in labor costs. The implications are clear: employers may face tighter margins, potentially passing costs onto consumers, which could fuel inflationary trends.
Real wages in the formal sector are showing a positive trend, signaling improved purchasing power for workers. Manufacturing real wages grew by 4.48%, reflecting a robust increase that boosts household income and spending capacity. In contrast, retail real wages are still positive but lag behind at 3.25%, with a recent decline that points to potential purchasing power erosion in that sector. This divergence suggests that while some workers are enjoying better financial conditions, others are facing stagnation, which could affect overall consumer sentiment.
Across sectors, the divergence in real wage growth is stark, with manufacturing clearly outperforming retail. Manufacturing is thriving with a strong 4.48% growth in real wages, while retail struggles at only 3.25%, following a recent dip. This gap signals that while manufacturers are capitalizing on labor gains, retail workers are not sharing in the same level of economic uplift. As inflation concerns loom, this discrepancy might lead to uneven consumer spending patterns, impacting overall economic stability.
SARIMAX Forecast Comparison
| Series | Current | Prev. Forecast | Error | 12M Forecast | Prev. 12M | Revision |
|---|---|---|---|---|---|---|
| ULC Manufacturing | — | — | — | 4.1 | 4.1 | +0.00 |
| ULC Retail | — | — | — | 1.2 | 1.2 | +0.00 |
| Real Wage Mfg | — | — | — | 4.3 | 4.3 | +0.00 |
| Real Wage Retail | — | — | — | 2.8 | 2.8 | +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: 2026-04-27 by Pablo Rivas
Key Takeaways
The April ENOE survey reveals a notable dip in the unemployment rate, reflecting broader labor market dynamics. The April 2026 ENOE survey shows unemployment at 3.31%, down from the previous month, indicating a slight improvement in labor market conditions. This marks a continuous downward trend, with the rate having fallen for three consecutive months. However, the current level remains around the 2nd percentile historically, underscoring persistent challenges in the job market.
By gender, the unemployment landscape presents a stark contrast, with men's rates notably higher. Male and female unemployment rates are currently at 3.51% and 3.62%, respectively, with both showing upward movement from the prior month. This divergence hints at growing challenges for men in the labor market, as their unemployment rate is approaching historical peaks, while female rates, although elevated, have been more stable recently.
Informal employment trends add another layer of complexity to the labor market narrative. The share of informal workers stands at 55.9%, reflecting a rising trend that has persisted over the last year. This increase signals potential vulnerabilities in job security and worker protections, as more individuals are drawn into informal employment amid economic uncertainty.
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 18 evaluation windows using the Dynamic Factor Model (DFM). Out-of-sample backtest over 18 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 0.54 vs 0.13 naive, n=15); 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: 2026-04-28 by Alexander Dentler
Key Takeaways
Mexican equity markets as of April 28, 2026, show excess returns at 0.2107, reflecting ongoing economic complexities. With data through April 28, 2026, excess returns remain at 0.2107, while realized volatility is recorded at 0.0093. Notably, the illiquidity measure, as captured by the Amihud index, has seen a slight increase, now standing at 105.39. The recent rise in volatility, particularly in response to increasing economic policy uncertainty, underscores the market's sensitivity to evolving geopolitical dynamics and domestic challenges.
The decomposition shows that recent volatility has been driven primarily by US policy shocks and liquidity constraints. Recent volatility has been influenced by persistent contributors such as uncertainty surrounding economic policies and fluctuations in liquidity, which have been significant over the past months. The heightened concerns regarding public security and economic stability have also played a role in shaping market sentiment, leading to a notable increase in excess returns relative to historical norms.
Investor sentiment remains cautious amid rising policy uncertainty, reflecting broader concerns in the market. Policy uncertainty, as indicated by the Economic Policy Uncertainty Index, continues to linger, complicating the outlook for both investors and policymakers. This sentiment is echoed in various investor surveys, highlighting a growing apprehension about the implications of domestic security issues on economic performance. The interplay between these sentiments and actual market behavior will be crucial as we move forward.
Volatility Measures
| Measure | Mar 2026 | Apr 2026 | Δ | Top Driver |
|---|---|---|---|---|
| Excess Return | -0.2169 | -0.0792 | +0.1377 | US Policy Shocks (+0.153) |
| Realized Volatility | 0.0122 | 0.0097 | -0.0025 | Investor Sentiment (-0.001) |
| Illiquidity (Amihud) | 147.1455 | 112.4913 | -34.6542 | 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: 2026-04-28 by Alexander Dentler
Key Takeaways
Banxico's April 2026 credit release shows money market spreads tightening, reflecting growing economic uncertainties. Following the latest April lending data, rate premia indicate that funding and TIIE spreads are currently at 0.03% and 0.27%, respectively. The TIIE 28-day rate has been revised downward, suggesting a tightening trend as spreads have narrowed by 0.0345% compared to the previous month. This ongoing contraction in spreads may signal a cautious approach among lenders, influenced by the prevailing economic policy uncertainties and declining consumer confidence.
Household mortgage rates are reflecting a challenging affordability landscape for borrowers. The total annual cost of mortgages, averaging at 13.9%, remains elevated, with rates ranging from 10.7% to 28.2%. The tightening in rate premia may hinder pass-through to borrowers, complicating affordability for new mortgage seekers and potentially stalling housing market activity in the coming months.
Debt issuance patterns show a notable preference for fixed-rate financing among corporations. The current composition indicates that fixed-rate instruments account for 18.74% of debt issuance, while variable rates, including inflation-linked options, make up a smaller share. This shift towards fixed-rate financing suggests that firms are seeking stability amid an uncertain economic environment, as they adapt their funding strategies to mitigate risks associated with fluctuating interest rates.
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.
