Mexico’s annual inflation rate fell to 3.94% in May, down sharply from 4.45% in April, placing it comfortably within the Banco de México’s target range of 3% plus or minus one percentage point. The reading, released by INEGI on June 9, actually came in below analyst expectations of 4.02%.
That’s the lowest inflation print in four months.
The numbers behind the cool-down
The data validates a decision Banxico already made. On May 7, the central bank trimmed its benchmark overnight interbank rate by 25 basis points to 6.50%. That cut was part of an easing cycle that began back in March 2024, when policymakers first started walking rates down from their restrictive peaks.
The drop from 4.45% to 3.94% in a single month is notable. Government subsidies and tax credits on energy prices did a lot of the heavy lifting, keeping fuel costs muted. Core goods prices also cooperated. Services inflation remains sticky, and it’s something Banxico is watching carefully.
