Background on the Situation
The International Monetary Fund (IMF) has revised its global economic growth projections, with Mexico experiencing the most significant downward adjustment. This information is contained in the World Economic Outlook (WEO).
Mexico’s Economic Projections
The IMF now anticipates that Mexico’s economy will contract by 0.5% in 2025, which is 1.7 percentage points lower than its January estimate of a 1.4% growth rate.
According to IMF experts, this revision largely reflects weaker-than-expected economic activity towards the end of last year and early this year, as well as the impact of tariffs imposed by the United States. Additional factors include geopolitical uncertainties and tightened financial conditions.
Impact of Tariffs
The IMF report, released during its Spring Meetings, explains that tariffs have a substantial negative impact on global activity. The countries most affected by these tariffs are Canada, Mexico, China, and the United States.
Comparison with Other Projections
The IMF’s projection is the second international organization to predict a recession for Mexico. On March 17, the Organisation for Economic Co-operation and Development (OECD) projected a deeper contraction of 1.3%, extending until 2026.
Future Economic Outlook for Mexico
For the upcoming year, IMF economists estimate that Mexico’s economic activity will reverse the decline and register a growth rate of 1.4%.
Key Questions and Answers
- What is the main reason for Mexico’s economic contraction projection? The primary factors contributing to the downward revision of Mexico’s economic growth projection are weaker-than-expected economic activity towards the end of 2024 and early 2025, as well as the impact of tariffs imposed by the United States.
- Which countries are most affected by the tariffs? According to the IMF, Canada, Mexico, China, and the United States are the countries most affected by these tariffs.
- What is the projected growth rate for Mexico in 2025? The IMF anticipates that Mexico’s economy will contract by 0.5% in 2025.
- What is the projected growth rate for Mexico in 2026? The OECD projects a deeper contraction of 1.3% for Mexico’s economy, extending until 2026.
- What is the projected growth rate for Mexico in 2025 according to the IMF? The IMF estimates that Mexico’s economic activity will grow by 1.4% in 2025.
