Background on the Economic Situation in Mexico
Mexico’s economy has been facing challenges, with a contraction in five months of 2025 so far. The Instituto Nacional de Estadística y Geografía (INEGI) reported that the economy is expected to shrink by 0.2% in November, following a slight recovery projected for October.
Monthly and Annual Economic Performance
According to the Indicador Oportuno de la Actividad Económica (IOAE), Mexico’s economy is projected to contract by 0.2% in November, after a modest growth of 0.5% in October. Over the course of nine months (January to September), the average monthly growth has been 0.09%. If this trend continues, the fourth-quarter Gross Domestic Product (GDP) growth would be 0.16%, and annual growth would amount to 0.22%.
Gabriela Siller, the director of economic and financial analysis at Banco Base, commented that if these projections hold, the annual GDP growth for 2025 would be approximately 0.44%. This is slightly below the federal government’s estimate, which ranges from 0.5% to 1.5% for the year.
Sectoral Analysis
The IOAE report indicates that both the industrial and service sectors are expected to experience contractions in November. The industrial sector is projected to decline by 0.3%, while the service sector is expected to contract by 0.1%.
Government and Expert Expectations
In previous months, the Secretaría de Hacienda y Crédito Público (SHCP) stated that the economy would recover in the final quarter of 2025, following a decline in the third quarter. Rodrigo Mariscal Paredes, head of the Economic Planning Unit at SHCP, expressed optimism about further improvements in the upcoming quarter.
The Citi Encuesta de Expectativas also forecasted a 0.4% growth for the end of 2025 and a 1.2% increase for the following year.
Key Questions and Answers
- What is the projected monthly growth for Mexico’s economy in November 2025? The IOAE estimates a contraction of 0.2%.
- How does this November projection compare to October’s expected growth? October was projected to see a 0.5% growth, making November’s contraction a shift from positive to negative growth.
- What are the expected contractions in the industrial and service sectors? The industrial sector is projected to decline by 0.3%, while the service sector is expected to contract by 0.1%.
- How does the projected annual growth for 2025 compare to the government’s estimate? The projected growth of approximately 0.44% is slightly below the government’s range of 0.5% to 1.5%.
- What are the SHCP’s expectations for the final quarter of 2025? The SHCP anticipates economic recovery in the final quarter, following a decline in the third quarter.
- What do the Citi Encuesta de Expectativas forecast for Mexico’s economic growth? The survey predicts a 0.4% growth for the end of 2025 and a 1.2% increase for the following year.
