Economics: Annual core inflation rose in January; it will most likely remain above 4% in 2026

MEXICO - Report 17 Feb 2026 by Mauricio González and Francisco González

Consumer inflation stood at 3.79% annually in January 2026, 10 basis points above December 2025 (3.69%) and very similar to the 2025 average, in a clear sign that it is not on a downward trend. The annual increase in prices in January was caused by the core component (as has been the case in recent months), which grew 4.52%, the largest increase since early 2024. In contrast, annual non-core inflation stood at 1.52%, recording very low rates since July of last year, after being at very high levels throughout 2024 and the first half of 2025.

Thus, it can be seen that if inflation has not exceeded the 4% level, it is because the volatile non-core component has had very low annual increases in recent months. However, if this were to change in the short term—for example, due to an abrupt shift in international prices of some commodities or agricultural products—it would imply that headline inflation would very easily exceed 4.0%.

In this context, Banco de Mexico (Banxico) decided to keep its benchmark rate unchanged at 7% at its most recent meeting on February 5, marking the first pause in the easing cycle that began in June 2024. This week's Economic Outlook analyzes the recent evolution of inflation and its prospects, as well as the implications of the monetary policy recently implemented by Banxico.

Regarding the week's indicators, it was reported that in December 2025, industrial production continued its moderate recovery (increasing 0.2% compared to the previous month), although at a slower rate than in the previous two months. On an annual basis, the increase in December was 1.5%, a figure consistent with the GDP's slight recovery in the last quarter of the year. Despite this, in the four main sectors, the performance of industrial activity for the full year was negative, contracting -1.1% compared to 2024, with mining -6.2%; construction -1.1%; manufacturing -0.4%; and electricity and water -0.2%. This represents the worst performance for industry since the pandemic.

Now read on...

Register to sample a report

Register
Must have at least 8 characters
Sign-in
Forgot your password?
Copyright 2026 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.