MEXICO CITY () – Mexico’s annual inflation rate likely fell in December, a poll of analysts showed on Tuesday, fueling bets the central bank will keep cutting its benchmark interest rate and potentially by more than in recent decisions.

The median estimate from 12 analysts showed December’s annual headline inflation rate falling to 4.28%, which would be its lowest level since October 2023 but still above the central bank’s official target rate of 3%, plus or minus a percentage point.

Core inflation, which strips out some especially volatile food and energy prices, likely ticked up in December to 3.62% after 22 months in decline.

Last month, the central bank delivered a 25-basis-point cut to its benchmark interest rate – its fifth in 2024 – bringing it down to 10.00%. Its board noted that given progress on disinflation, larger downward adjustments could be considered in future meetings.

In an interview with days later, Deputy Governor Jonathan Heath said the central bank’s governing board could discuss a cut of up to 50 basis points in its first decision of 2025, scheduled for Feb. 6.

In December alone, consumer prices likely edged up 0.40% from the previous month while core prices are expected to have ticked up 0.45%, according to the poll.

INEGI, the national statistics institute, will release official consumer price data for December on Thursday.