Overview of Mexico’s Internal Demand Components
In July 2025, Mexico’s major components of internal demand displayed varied behaviors, with their common thread being overall weakness compared to 2024 levels, according to data released by the National Institute of Statistics and Geography (Inegi) on Friday.
Private Consumption
Private consumption, the largest component of aggregate demand with nearly 70% of GDP, contracted by 0.3% on the month, weighed down by a decrease in domestic spending on goods and services. This spending dropped by 0.5%.
- The monthly decline also marked a 0.1% year-over-year drop, the fifth such decline in the first seven months of 2025.
- From January to July, private consumption has fallen by 0.4%, contrasting with the 4.3% growth seen in the same period of 2024.
Gross Fixed Capital Formation (Investment)
Gross fixed capital formation, or fixed investment, with a 22% GDP coefficient, improved by 1.6% on the month but was 7.2% lower than its 2024 level.
- Machinery and equipment spending led the monthly uptick, rising by 4.9%, marking the largest month-over-month variation since December 2022, when it expanded by 6.4%.
- Over the first seven months of 2025, investment has decreased by 6.8%, contrasting with the 7.8% growth shown during the same period in 2024.
Key Questions and Answers
- What are the major components of Mexico’s internal demand? The primary components are private consumption and gross fixed capital formation (investment).
- How did private consumption perform in July 2025? Private consumption contracted by 0.3% on the month and fell by 0.1% year-over-year, marking the fifth consecutive monthly decline in the first seven months of 2025.
- What was the performance of gross fixed capital formation in July 2025? It improved by 1.6% on the month but was 7.2% lower than July 2024’s level. Machinery and equipment spending led the uptick, rising by 4.9%.
- How have these components performed year-to-date in 2025 compared to 2024? Private consumption has decreased by 0.4% from January to July 2025, contrasting with the 4.3% growth in the same period of 2024. Gross fixed capital formation has dropped by 6.8% in 2025, compared to the 7.8% growth in 2024.
