Banxico raised its 2026 GDP growth forecast to 1.8% from 1.5%, citing stronger domestic demand, consumption and investment, nearshoring activity, a resilient labor market and services sector. It also lifted its average headline inflation forecast to 4.2% from 3.9% and delayed convergence to the 3% target until the first quarter of 2027, compared with the previous estimate of the fourth quarter of 2026. The bank has kept its benchmark interest rate at 10.50% since November 2024, and analysts expect no rate cut before the second quarter of 2026. Banxico said inflation risks remain tilted upward because of possible exchange-rate depreciation, wage growth and energy prices, while uncertainty persists over global trade policy, domestic politics, fiscal consolidation and a review of the central bank’s autonomy. The peso was little changed after the report, while bond yields rose slightly. An earlier report cited in the existing record contained different revisions, including a 1.5% growth forecast from 1.1%, a fourth-quarter 2027 inflation-target timeline from the second quarter, a 3.5% fourth-quarter 2026 core-inflation forecast and a 2.0% 2027 growth forecast; the timing discrepancy between the reports cannot be resolved from the available material.