Banxico forecasts 2026 GDP growth at 1.5% (prev. 1.1%) and 2027 GDP growth at 2.0% (prev. 2.1%); forecasts average annual core inflation in Q4 of 3.5% (prev. 3.4%) and annual average headline inflation in Q4 of 3.5% (prev. 3.5%)

• Forecasts average annual core inflation in Q4 2027 at 3.0% (prev. 3.0%)
• Forecasts average annual headline inflation in Q4 2027 at 3.0% (prev. 3.0%).
• National economy continues to experience a period of weakness and faces a complex external environemnt subject to significant geopolitical risks.
• National economy continues to experience a period of weakness with uncertainty surrounding the USMCA annual review process process.
• Balance of risks to inflation remain skewed to the upside.

This is the forecast refresh from Banxico's quarterly report rather than a rate decision, so the signal sits in the revisions and the risk language, not in any policy action. The pattern to note is the divergence: near-term growth revised up while the following year is trimmed, and core inflation nudged higher at the end of the horizon with the balance of risks still described as skewed to the upside. In past episodes of this kind, a central bank flagging upside inflation risk alongside a weak economy has tended to slow rather than reverse an easing cycle, steepening the expected pause profile at the front of the TIIE curve and supporting the short end of local rates. The explicit reference to USMCA review uncertainty and a complex external environment is the tell for what conditions the path: Mexican forecast rounds have historically been sensitive to the trade and peso channel, with currency weakness feeding directly into the inflation risk assessment. The follow-ons worth watching are the accompanying statement language from the governor and board, any change in the perceived split among members, and whether the peso validates or undercuts the upside-risk framing ahead of the next policy meeting.