Background on the Mexican Economy and INEGI
The Instituto Nacional de Estadística y Geografía (INEGI), Mexico’s official statistics agency, is responsible for providing timely and accurate economic data. INEGI’s reports are crucial for understanding the country’s economic health and performance.
April Economic Growth Projection
According to the information released on Monday by INEGI, Mexico’s economy is projected to show zero growth in April. The Indicador Oportuno de la Actividad Económica (IOAE) reported a 0.0% variation compared to the previous month.
Transition from Contraction to Stagnation
This shift marks a change from the 0.2% monthly contraction experienced in March to economic stagnation in April, amidst a climate of uncertainty.
- March: -0.2% monthly growth
- April: 0.0% monthly growth (stagnation)
Sectoral Performance in April
INEGI’s report also indicated that both secondary and tertiary activities experienced a monthly contraction of 0.1% each.
Economic Uncertainty and External Factors
The prevailing economic uncertainty in Mexico is largely driven by the policy decisions of the United States. This has led to expectations of reduced economic dynamism, with some institutions even warning of a possible contraction.
Recent PIB Estimates and Recession Concerns
Just recently, the preliminary PIB estimate showed a trimester growth of 0.2%, helping Mexico avoid what is known as “technical recession.”
The risk of recession has not disappeared. Despite the trimester PIB growth at the beginning of the year, avoiding a ‘technical recession,’ it was due to the bounce back of primary activities that represent only 3.4% of the PIB and tend to be volatile.
— Gabriela Siller (@gabsillermx) April 1, 2020
Gabriela Siller, director of Economic and Financial Analysis at Banco Base, highlighted the vulnerability of the recent PIB growth based on primary activities.
Government Perspective and Optimistic Growth Projections
The Secretaría de Hacienda y Crédito Público (SHCP), led by Edgar Amador Zamora, maintains an optimistic outlook for Mexico’s economic expansion in 2025, contrary to recession concerns.
The Mexican economy faced a highly volatile environment in Q1 2025, mainly due to modifications in the US trade policy. This context, combined with an expected decrease in aggregate demand, has led to a moderation of economic activity… This performance, although moderated, is consistent with an orderly adjustment and far from a generalized contraction, confirming that the Mexican economy continues to expand.
— Edgar Amador (@EdgarAmadorZ) April 1, 2023
Edgar Amador, the Secretary of Hacienda, emphasized that various indicators have shown resilience to external shocks. The SHCP still projects a growth range of 1.5% to 2.3% for the year, which some consider overly optimistic given the current economic climate.
- SHCP growth projection: 1.5% – 2.3%
- International Monetary Fund (IMF) projection: 0.3%
Key Questions and Answers
- Q: What does zero growth in April mean for the Mexican economy?
A: Zero growth indicates that the Mexican economy is not expanding or contracting in April, suggesting stagnation. - Q: How does the recent PIB estimate affect recession concerns?
A: The 0.2% trimester PIB growth helped avoid a technical recession, but primary activities’ vulnerability highlights ongoing risks. - Q: What is the government’s outlook for Mexico’s economic expansion in 2025?
A: The Secretaría de Hacienda y Crédito Público projects a growth range of 1.5% to 2.3%, despite external uncertainties. - Q: How do international organizations view Mexico’s growth prospects?
A: The International Monetary Fund projects a more modest growth of 0.3% for Mexico in 2025.
