In 2026, Mexico is expected to face a relatively more favorable environment compared to 2025. Several factors are set to support this outlook, including the reconfiguration of global supply chains, a boost to consumption associated with the World Cup, the competitive advantage derived from the USMCA, and a potential reactivation of public investment. Inflation declined steadily throughout 2025 and remained within Banco de México’s target range for ten consecutive months, allowing for cumulative rate cuts of 300 bp. However, during the first half of 2026 we anticipate a temporary rebound toward levels close to 4.8%, driven by higher taxes on selected goods, increased tariffs on imports from countries without a trade agreement, and the hike in the minimum wage. In this context, we estimate that Banco de México will pause its easing cycle during the first half of 2026, alongside an upward revision to its inflation forecast for the year. Rate cuts are expected to resume in the second half of the year, with the policy rate ending 2026 at 6.50%.