Economic Recovery and Current State
Mexico’s economic activity increased by 1% on a monthly basis in October, recovering from the previous month’s decline and showing progress across all activities. However, experts agree that Mexico’s economic activity still displays signs of weakness and estimate annual growth of only 0.4-0.6% for the entirety of 2025.
Indicators and Growth
The Global Indicator of Economic Activity (IGAE) grew by 1% on a monthly basis following a 0.4% drop in September, according to deseasonalized figures from the National Institute of Statistics and Geography (Inegi). On an annual basis, the increase was 1.6%.
October’s growth surpassed the prediction of the Early Indicator of Economic Activity (IOAE), which projected a mere 0.5% growth, and it is the highest monthly variation since July 2024.
Despite the growth, analysts from Grupo Financiero Monex noted that “the October IGAE figures suggest Mexico’s economy remains fragile, despite the observed margin uptick.”
“The monthly advance was primarily driven by primary and tertiary activities, while the industrial sector, particularly manufacturing, continued to show weakness, remaining in contraction territory,” they stated.
Tertiary Activities Showed Strong Growth
In October, primary activities (agricultural and livestock) increased by 1.4% on a monthly basis, tertiary activities (commerce and services) by 1.2%, and secondary activities (industrial) grew by 0.7%.
On an annual basis, primary activities advanced by 11.8%, tertiary activities by 2.5%, while secondary activities fell by 0.7%.
Analysts from Grupo Financiero Base explained that October’s IGAE figures indicate a rebound in secondary and tertiary activities, but there isn’t enough information to confirm a shift in economic activity trend.
“The IGAE rebound, particularly in tertiary activities, reduces the likelihood of the Q4 GDP confirming a quarterly contraction but is insufficient to confirm a shift towards sustained PIB growth,” Banco Base specialists said.
Accumulated Growth of 0.2% in 2025
Monex analysts pointed out that with October’s figures, the accumulated economic activity for 2025 shows a marginal growth of 0.2%, “reflecting a significant loss of dynamism in the main productive sectors.”
Banco Base experts reminded us that the IOAE in November experienced a monthly contraction of 0.2%, resulting in an average monthly growth of 0.16% between January and November.
“Assuming this growth continues in December, Q4 GDP would show a growth rate close to 0.78% and an annual growth rate of 1.17%. If this materializes, Mexico’s PIB would grow annually by 0.60% compared to 2024, according to Banco Base.”
Challenges Heading into Year-End
Monex experts concluded that, as 2025 nears its end, challenges remain associated with the weakening of manufacturing, trade environment uncertainty, and a domestic political-economic context under pressure, which will continue to limit growth prospects.
“Under these circumstances, we estimate a 0.41% annual PIB expansion by year-end,” they concluded.
Key Questions and Answers
- Q: What was the monthly growth rate of Mexico’s economic activity in October? A: 1%
- Q: How do experts view Mexico’s economic activity in 2025? A: Experts agree that Mexico’s economic activity still displays signs of weakness and estimate annual growth of only 0.4-0.6% for the entirety of 2025.
- Q: Which sectors drove the growth in October? A: Primary and tertiary activities, such as agriculture, commerce, and services, drove the growth in October.
- Q: What is the projected annual growth rate for Mexico’s PIB in 2025? A: Banco Base estimates an annual growth rate of 0.60% for Mexico’s PIB in 2025 compared to 2024.
- Q: What challenges does Mexico’s economy face heading into year-end 2025? A: Challenges include weakening manufacturing, trade environment uncertainty, and a domestic political-economic context under pressure.
