Overview of Recent Economic Indicators
After a first half filled with uncertainty and some signs of cooling, Mexico’s economy appears to be showing better signals for the second half of the year, according to information released by Mexico’s National Institute of Statistics and Geography (Inegi).
The Indicador Adelantado Shows Improvement
In August, the Indicador Adelantado stood at 100.4 points, surpassing its long-term trend. This marks two consecutive months above the 100-point mark after previously falling below its long-term trend.
Gabriela Siller, Director of Economic and Financial Analysis at Banco Base, explained that “the recent recovery of the Indicador Adelantado signals that Mexico’s economy could show more dynamism in the coming months.”
With August’s data, the Indicador Adelantado has shown five months of progress. The improvement in this indicator is attributed to advances in four of its five components, including the Standard & Poor’s Index and the Mexican Stock Exchange’s Price and Quotation Index.
However, the Interbank Interest Rate and Mexico-US Exchange Rate components continued to decline in August, falling by 0.22 points and 0.17 points, respectively.
The Coincident Index Continues to Decline
On the other hand, the Coincident Index, which reflects the overall state of the economy, has remained below its long-term trend and continued to decline in July.
The Inegi report showed that in July, the Coincident Index fell by 0.06 points monthly, marking 23 consecutive months of decline and reaching 99.5 points, below its long-term trend.
According to Siller, “when the Coincident Index is below its long-term trend, it suggests that the economy is in a recessionary phase.”
The Inegi report noted that the indicator’s decline was due to four of its six components falling in July, with the Industrial Activity Indicator showing the largest drop at 0.13 points, followed by the Global Economic Activity Indicator at 0.10 points.
The Urban Unemployment Rate was the only component of the Coincident Index that increased, rising by 0.07 points compared to June.
Growing Optimism and Economic Improvement
In recent months, various institutions and organizations have revised their growth expectations for Mexico upwards after initially cutting them and even warning of a recession due to trade uncertainty.
In contrast, the federal government reduced its growth projection for this year, lowering it from a range of 2-3% to 0.5-1.5%, placing it above some estimates predicting a 1% GDP for this year.
Moreover, the Secretariat of Public Finance and Credit (SHCP), under Édgar Amador Zamora, has repeatedly dismissed the possibility of a recession this year.
“This estimate reflects the resilience of the domestic market, the dynamism of the external sector, and the strengthening of investment in the second half of the year,” stated the department in the General Criteria for Economic Policy 2026.
Meanwhile, the latest Expectations Survey conducted by the Bank of Mexico (Banxico) among private sector experts showed an improvement in economic forecasts for this year.
Of the 45 specialists consulted by the central bank, 42 revised their GDP projection upwards from 0.46% to 0.53% for the year’s end, according to the average.
Banxico anticipates that Mexico’s economy will expand by 0.6% this year.
Key Questions and Answers
- What are the recent economic indicators showing for Mexico’s economy? The Indicador Adelantado has been above its long-term trend for two consecutive months, signaling potential economic dynamism. However, the Coincident Index continues to decline, suggesting a possible recessionary phase.
- How have recent projections for Mexico’s economy changed? Various institutions and organizations have revised their growth expectations for Mexico upwards after initial cuts due to trade uncertainty. The federal government lowered its growth projection for this year but still anticipates a higher rate than some estimates predicting a 1% GDP.
- What does the Coincident Index’s decline indicate about Mexico’s economy? When the Coincident Index falls below its long-term trend, it suggests that the economy may be in a recessionary phase. In this case, four out of six components fell in July, with the Industrial Activity Indicator and Global Economic Activity Indicator showing significant drops.
