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September 24, 2025
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Taxes and tariffs will raise inflation in 2026 and test Banxico

Taxes and tariffs will raise inflation in 2026 and test Banxico

A Banamex analysis calculates a rebound in inflation to 4.3% in 2026, placing the index again outside the goal of Banxico. But some economists warn that the real challenge will be to maintain the credibility of Banxico. If trust falters, the blow that transitory looks today could extend and complicate the cycle of feat cuts.

The most prudent would be to stop the adjustment cycle at the referential rate, until they are certain that these clashes will in effect will be at once

Alejandro Saldaña, Bank chief economist sees for more.

Banamex estimates that the collection measures of the tax package 2026 – participating the increase to tobacco IEPS, sugary drinks, bets and violent video games, in addition to the new tariffs to imports from countries such as China, Korea and India – will add 41 base points to inflation. With this, this banking institution adjusted its forecast for inflation by 2026 to 4.3% from 3.9%.

The central vision is shared by Alejandro Saldaña, an economist in Banco VE for more, and Gerónimo Ugarte, chief economist of Valmex. Both agree that the impact will be immediate and transitory, concentrated in the first months of the year.

Risk of a major rebound

This IEPS adjustment proposed in the 2026 economic package is different because not only updates fees, but also raises rates significantly, creates new levies and is combined with tariffs, generating a greater inflation impact. In addition, it arrives in a context of lower margin for Banxico, which tests its credibility.

Alejandro Saldaña warns that the predictable effect in January could be stronger than in other years. While this type of supply shocks are usually diluted, the risk is that they continue if the agents perceive that the credibility of Banxico Flaquea.

“Offer shocks, as those mentioned, do not necessarily lead to the formation of an inflationary process and a change in the course of monetary policy. This, as long as its effect is ‘only once’, for which it is necessary condition that the Central Bank has credibility (…) When expectations are not well anchored, offer shocks can induce a second -order inflationary process,” he said.

The expert considers prudent that Banxico stops his cycle of cuts to confirm that the price increases will be, in effect, at once.

Ugarte calculates that the prices adjustment could add between 20 and 40 base points to the general inflation of 2026, especially in energy, tobacco and drinks. Although it does not anticipate a wide second round effect, it warns that the Central Bank must maintain prudence not to complicate convergence towards the inflationary goal.

“Even if the institution maintains a downward bias in rates, it would be prudent to avoid excessive relaxation at a time when prices could present a temporary rebound, since this would complicate convergence towards the inflationary goal,” he said.

The background debate

Both Banamex and analysts agree that the key will not be whether inflation goes up – that is practically discounted – but how fast the rebound will dissipate and if Banxico will have room to continue reducing rates without putting expectations at risk.

Banamex projects that the reference rate will be 7% at the end of 2025 and that, after a pause in the first quarter, it can lower up to 6.5% at the end of 2026.

The decision will depend on whether IEPS derived shocks and tariffs are confirmed as transitory or if, as experts warn, they test the confidence of markets in the discipline of the Central Bank.



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