Overview of Mexico’s Economic Growth Projections
Market consensus anticipates that Mexico’s economy will grow by 0.1% this year, according to information gathered by FocusEconomics.
This median growth projection contrasts with the 1.1% expected at the beginning of the year.
Out of 45 analysts consulted by the firm, seven expect an economic contraction; six predict zero growth, and 33 believe the activity will barely surpass zero to achieve a growth between 0.2% and 1.5%, in the best-case scenario.
Factors Impacting Mexico’s Economic Growth
According to the panelists, deportations, protectionism, and the economic slowdown in the United States will hinder exports and remittances, which are also factored into their economic forecasts.
This weakening of growth drivers will, however, help alleviate inflationary pressures. Consequently, they anticipate that the National Consumer Price Index (INPC) will vary by an average of 3.9%, slightly above the 3.8% projected in June.
Fiscal Balance on Track with Target
FocusEconomics’ monthly report of gathered expectations reveals that panelists anticipate the federal government will succeed in reducing the fiscal deficit inherited from the previous administration, as per the set target.
In Claudia Sheinbaum’s first year of governance, this deficit is expected to decrease by slightly more than a decimal point, leaving it at 3.8% of GDP.
This deficit, expected to be achieved by year’s end, will be below the historical 4.9% of GDP left by former President Andrés Manuel López Obrador.
Despite the consolidation efforts, panelists consulted anticipate that the following year, this deficit will only drop to 3.5% of GDP.
Expectations for 2026
According to the expectations gathered by FocusEconomics, experts consulted anticipate that Mexico’s economy will recover next year, allowing it to achieve a growth of 1.3%.
If accurate, this will be the third consecutive year with economic growth below its average potential of 2.5%.
Despite this economic weakness, they predict that inflation will vary by 3.7% by year’s end. This forecast remains above Banco de México’s specific target of 3%, but within the permissible variability range of 4%.
Mexico’s Growth Compared to Regional Counterparts
Upon reviewing growth expectations for Brazil and Central America, Mexico is projected to have the least growth this year.
However, the regional outlook includes a prediction of contraction in Haiti (-1.5%) and Cuba (0.6%).
Mexico’s GDP stagnation contrasts with the 2.2% expected for Brazil and will be significantly below the 2.1% average anticipated for Latin America and the Caribbean.
Key Questions and Answers
- What is the current growth projection for Mexico’s economy? According to FocusEconomics, the market consensus anticipates a 0.1% growth for Mexico’s economy this year.
- How will the US economic slowdown affect Mexico? The panelists believe that deportations, protectionism, and the US economic slowdown will hinder Mexico’s exports and remittances.
- What is the expected inflation rate in Mexico by the end of the year? Despite economic weakness, experts predict an inflation rate of 3.7% by the end of the year.
- How is Mexico’s fiscal balance expected to perform? The federal government is anticipated to reduce the fiscal deficit to 3.8% of GDP, below the historical 4.9% left by the previous administration.
- How does Mexico’s growth compare to other countries in the region? Although Mexico is projected to have the least growth this year, it still outperforms Haiti and Cuba in terms of GDP growth.
