Background on Banxico and Its Significance
Banxico, or the Bank of Mexico, is the country’s central bank responsible for managing monetary policy and ensuring financial stability. Its recent report on Mexico’s Current Account highlights the nation’s economic performance and its position in the global market.
Current Account Surplus Details
In the second quarter of 2025, Mexico’s Current Account reported its first surplus since the fourth quarter of 2024, amidst ongoing global economic uncertainty. According to Banxico, the surplus amounted to $206 million.
This positive outcome was attributed to a combination of factors: a $887 million surplus in goods and services, a $15.898 billion deficit in primary income, and a $15.217 billion surplus in secondary income.
The Current Account surplus represented 0.04% of the country’s Productive Internal Bruto (PIB).
Factors Contributing to the Surplus
The annual increase in the Current Account balance was primarily due to an increase in non-oil merchandise and a decrease in service deficits. However, these gains were partially offset by expansions in primary income and oil merchandise deficits, along with a reduction in secondary income surplus.
Export Manufacturing and Global Growth
Valmex, an analysis firm, noted that the dynamism of export manufacturing will continue to support the Current Account. However, they anticipate that slower global growth and uncertainty surrounding US trade decisions will limit progress in the external sector.
Foreign Direct Investment (FDI) and Capital Outflow
Regarding Foreign Direct Investment (FDI), Valmex suggested that inflows might be moderated by cautious business practices in a slowing economy and reduced public spending in Mexico.
Capital outflow totaled $8,071 million in Q2 2025, surpassing the $871 million reported in the first quarter of 2025.
Janneth Quiroz, Director of Economic Analysis, Cambiario, and Bursátil at Monex, explained that this could be attributed to the prevailing global uncertainty and nervousness. This environment typically prompts investors to shift funds towards lower-risk assets.
Despite this, the Mexican peso appreciated by 8.4% against the US dollar in Q2 2025, suggesting that the Capital Account balance might reflect currency conversion effects rather than actual investment withdrawals.
Key Questions and Answers
- What is the Current Account surplus, and why is it important? The Current Account surplus indicates that a country is exporting more than importing, leading to a net inflow of foreign currency. This surplus contributes positively to Mexico’s overall economic stability and global standing.
- What factors contributed to the recent surplus in Mexico’s Current Account? The surplus was primarily due to a higher non-oil merchandise export, reduced service deficits, and favorable terms in secondary income. However, these gains were partially offset by increased primary income deficits and oil merchandise deficits.
- How will export manufacturing impact the Current Account in the future? Export manufacturing dynamism will continue to support Mexico’s Current Account. However, slower global growth and trade uncertainty may limit further progress in the external sector.
- What are the potential implications of capital outflow on Mexico’s economy? Capital outflow, as seen in Q2 2025, could indicate investor caution due to economic slowdown and reduced public spending. However, the peso’s appreciation against the US dollar suggests that currency conversion effects might be at play rather than actual investment withdrawals.
