Who is Julio Ruiz and Why is He Relevant?
Julio Ruiz, the Chief Economist for Citi Mexico, has issued a warning that the Mexican economy is currently in a technical recession. His expertise and position at Citi Mexico make his statements significant, as they reflect the bank’s thorough analysis and understanding of the country’s economic landscape.
Mexico’s Economic Contraction
According to Ruiz, the Mexican economy has experienced a decline in its Gross Domestic Product (GDP) for two consecutive quarters. In the last quarter of 2024, the GDP fell by 0.6%, and it is estimated to have contracted another 0.4% in the first quarter of 2025.
This consecutive contraction fulfills the basic definition of a technical recession, which is two quarters of negative growth or stagnation.
Analysts’ Downward Revisions to Growth Forecasts
Just before Ruiz’s warning, analysts participating in the Citi Expectations Survey once again reduced their growth forecast for Mexico’s economy in 2025. Originally predicting a growth rate of 0.3%, the consensus now stands at 0.2%.
Citi Mexico has identified several factors contributing to the diminished economic outlook, including uncertainty surrounding tariffs imposed by Donald Trump and internal changes in Mexico, such as the upcoming judicial election on June 1.
Public Debt Projections
Ruiz stated that Citi Mexico projects the public debt in Mexico to reach 55.4% of the GDP by the end of 2025, which is higher than the Secretariat of Finance and Public Credit (SHCP)’s projection of 52.3%.
“In our projection, we have factored in a more favorable exchange rate than the SHCP and a larger fiscal deficit of 5.0% of the GDP for 2025, compared to their estimate of 3.9-4.0%,” explained Ruiz.
Gasoline Pact and Inflation
Ruiz also mentioned that if the gasoline pact, which keeps the Magna fuel price at or below 24 pesos per liter for six months, remains in effect, it could help lower the inflation rate in Mexico below current projections.
Citi Mexico currently forecasts that general inflation in Mexico will close out 2025 at 3.9%. However, Ruiz suggests that adhering to the gasoline pact could reduce inflation by approximately 10 basis points, bringing the projected inflation rate down to 3.8% by the end of 2025.
Key Questions and Answers
- What is a technical recession? A technical recession refers to two consecutive quarters of negative economic growth or stagnation.
- Who is Julio Ruiz, and why is his opinion important? Julio Ruiz is the Chief Economist for Citi Mexico. His expertise and position make his statements significant, as they reflect the bank’s thorough analysis of Mexico’s economic situation.
- What factors are contributing to the diminished economic outlook in Mexico? Factors include uncertainty surrounding tariffs imposed by Donald Trump and internal changes in Mexico, such as the upcoming judicial election on June 1.
- What are Citi Mexico’s projections for public debt and inflation? Citi Mexico projects the public debt to reach 55.4% of the GDP by the end of 2025, higher than the SHCP’s estimate. They also forecast general inflation to close out 2025 at 3.9%, but suggest that adhering to the gasoline pact could reduce inflation by approximately 10 basis points, bringing the projected rate down to 3.8%.
