Banco de México Rate Decision
The governing board of Banco de México released minutes from its August meeting indicating that all members voted unanimously to keep the reference interest rate unchanged at 6.5%. The board stated that maintaining the current level was appropriate given the prevailing economic environment.
Inflation Outlook
Board members highlighted that global uncertainty remains high, with particular concern over the ongoing Middle East conflict, which they said poses upside risks to inflation and could negatively affect global economic activity if it escalates. They noted that both headline and core inflation are still expected to decline over the forecast horizon, but the pace of decline is slower than previously anticipated because services inflation remains persistent. The reduction in core inflation is attributed mainly to a fall in merchandise inflation. Overall, the balance of risks to the inflation trajectory is viewed as biased to the upside.
Economic Growth Assessment
Despite a recent quarter of GDP expansion, the board observed that the output gap remains in negative territory. One member suggested that the economy’s growth rate in 2026 could exceed the bank’s current forecast of 1.1%, while another member expressed that the balance of risks to economic activity is biased to the downside.
Climate‑Related Inflationary Pressure
The minutes also recorded that a member warned the intensification of the El Niño phenomenon in the second half of the year could exert direct inflationary pressures and potentially generate second‑round effects.