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IMF sees Mexico growing 1.5% in 2026, with inflation not sustainably back at 3% before 2028

The Fund's mission recommends keeping rates moderately restrictive and raising revenue to curb rising public debt.

By Miguel Díaz Miró · Responsible editor ·
International Monetary Fund headquarters in Washington

The International Monetary Fund (IMF) expects Mexico's economy to grow 1.5% in 2026 and 1.8% in 2027, according to its staff's concluding statement for the Article IV mission, published on October 2, 2026. The Article IV is the IMF's annual review of each member country's economy.

Inflation: near target, but no rush to cut rates

According to the IMF, headline inflation is near the Bank of Mexico's 3% target, though core pressures persist. The Fund projects inflation of 3.6% at the end of 2026 and does not expect a sustained return to target before early 2028.

The mission therefore recommends Banxico keep a moderately restrictive stance until there are clear signs inflation is durably converging, and that the exchange rate remain flexible.

Debt and public finances

The IMF estimates a fiscal deficit of 4.2% of GDP in 2026 and 3.9% in 2027, with public debt still rising: 62.1% of GDP in 2026 and 62.9% in 2027. The mission says greater effort is needed to put it on a downward path.

Revenue options suggested by the staff include:

  • Raising local property and vehicle taxes.
  • Gradually phasing out border-zone tax incentives.
  • Broadening the carbon tax.
  • Reforming personal income tax and promoting formal employment.

The IMF also says Pemex needs sustained strengthening of its finances and suggests phasing out fuel subsidies. It describes the banking system as solid, with strong capital and low delinquency.

What it means for your wallet in Cancún

IMF recommendations are not binding: any tax change would have to go through Mexico's Congress or state legislatures. Still, they help frame the outlook:

  • Expensive credit for longer: if Banxico follows the advice, rates on credit cards, personal loans and car loans would be slow to fall. Before borrowing, compare the CAT (total annual cost) using Condusef's simulators.
  • Savings: with rates still high, instruments such as Cetes continue to pay above expected inflation.
  • Gasoline: the IMF suggests phasing out fuel subsidies; pump prices are currently held down by federal incentives. Profeco's weekly price reports are worth watching.
  • Property tax: the debate over local property taxes matters in a fast-growing real estate market like Cancún, though no formal proposal has come out of this document.

The full statement is available on the IMF website.

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