2026/06/09 | Julia Passabom & Mariana Ramirez
Bi-weekly CPI for 2H May fell 0.13%, undershooting both consensus (+0.05%) and our call (+0.07%). Core rose 0.08%, also below expectations (consensus: 0.12%; Itaú: 0.15%). Within the core basket, tradables rose 0.10% bi-weekly, with food prices posting an increase of 0.23% and non-food tradables decreasing 0.01%, reflecting the Hot Sale discounts. Core services advanced 0.07%, with housing up 0.18% and other services decreasing 0.04%, explained by deflation in air transportation, following two periods of increases and despite higher demand before the World Cup. Non-core CPI fell by -0.86%, led by declines in key agricultural products (e.g., chili, tomatoes, lemons).
In year-over-year terms, headline inflation printed at 3.94% in May, below the upper bound of Banxico’s target range. Core inflation eased to 4.19%, driven by tradables, which declined to 3.78% (from 3.99% previously), while services increased 4.57% (from 4.52%). On a 3-month moving average SAAR basis, core inflation remained unchanged in 3.80%, with tradables at 2.75% and services at 4.75%, highlighting continued divergence across components. Within services, pressures in housing and other services persist, while education showed signs of moderation—consistent with a gradual but uneven disinflation process.
Our take: The print supports a gradual disinflation narrative. Goods inflation continues to benefit from FX strength, while the drop in services—driven by volatile tourism components—adds near-term relief. Services stickiness persists, pointing to an uneven disinflation path. We keep our year-end inflation forecast at 4.1% and see rates at 6.5% through 2027. However, the bias remains toward easing, contingent on FX stability, weak activity, and further disinflation progress.
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