Inflation Forecast: 2h – Oct 2025

We expect inflation for the second half of October to stand at 0.09% biweekly, amid lower pressures on agricultural product prices. On an annual basis, headline inflation for October would stand at 3.54%.

Typically, inflation for this period averages 0.19% bw. Our lower estimate reflects reduced pressure from the non-core component (0.00% bw vs. 0.39% historical). Within this category, we anticipate lower pressures on agricultural products, with a decrease of -0.10% bw (vs. 1.40% historical), as well as on livestock products (0.00% bw vs. 0.25% historical).

Regarding core inflation, we expect an increase of 0.11% bw, slightly below its historical average of 0.13% bw. Within this component, goods would register 0.05% bw (vs. 0.10% historical) and services 0.17% bw (vs. 0.16% historical).

With this information, in October annual headline inflation would decline from 3.76% to 3.54%; core inflation would remain at 4.28%, while non-core inflation would fall from 2.02% to 1.09%.

As a result, inflation would mark eight consecutive fortnights within Banco de México’s target range, and we expect this trend to continue toward year-end. In this context, we foresee a 25-basis-point cut in the policy rate by Banco de México at its meeting tomorrow, bringing it to 7.25%, and we anticipate another cut in December, closing the year at 7.00%.