Mexico's headline inflation eased to 3.94% year on year in May, marking the second consecutive month of slowing price growth and moving back within the central bank's target band, official figures showed on Tuesday.
The May reading was lower than the 4.45% reported for April and came in below the 4.2% rise economists had expected in a poll. The monthly pace of consumer prices also registered a decline, with non-seasonally adjusted data indicating a 0.21% fall in May compared with April.
Mexico's central bank sets an inflation goal of 3%, and it regards outcomes within one percentage point above or below that figure as within its acceptable range. The bank has said it projects inflation will reach the 3% target in the second quarter of 2027.
The latest statistics therefore place annual inflation back inside the policy band that Banxico uses to judge price stability. The monthly contraction in prices, measured without seasonal adjustment, adds an additional datapoint showing short-term easing in consumer costs for May.
Context and interpretation
The data show a continuation of the deceleration that began before May, with the annual rate falling for a second month. The comparison with economists' forecasts indicates the outturn was modestly below market expectations for the month.
Banxico's projection that inflation will reach 3% in the second quarter of 2027 remains in place. That projection provides an explicit timing for when the central bank expects inflation to meet its numerical target, although the bank's acceptable range extends one percentage point above and below that 3% goal.
Data highlights
- Annual inflation in May: 3.94%.
- Annual inflation in April: 4.45%.
- Economists' poll forecast for May: 4.2%.
- Monthly change in May, non-seasonally adjusted: -0.21%.
- Banxico target: 3% with a +/- 1 percentage point acceptable range.
- Banxico projection for achieving 3%: second quarter of 2027.
Implications
The May figures show inflation returning to the band used by the central bank to assess price stability, and the monthly decline signals a short-term reduction in consumer price pressure for that month. The central bank's published timeline to the 3% target remains a point of reference in policy discussions.