BBVA Mexico’s Economic Outlook Highlights Service Sector Resilience
The report, crafted by the economic studies department of BBVA Mexico, indicates a significant slowdown in overall economic activity, both from the demand and supply sides.
2024 Economic Performance Overview
The report, presented on Thursday, detailed that in 2024, the overall economy experienced a deceleration with a total Gross Domestic Product (GDP) growth of 1.5%. This slowdown was evident across sectors.
- Primary sector GDP contracted by 2.3%
- Secondary sector GDP barely advanced with a marginal growth of 0.2%
- Services sector GDP grew by 2.3%
“Within the services sector, professional, health, and transportation services exhibited the highest annual growth rates,” the report specified.
Services Sector to Dominate Economic Contribution
The BBVA Mexico economic studies report forecasts that despite a challenging macroeconomic scenario, the services sector will once again be the largest contributor to Mexico’s economy in 2025, especially financial services and mass media.
- Financial Services: A decrease in the reference rate will lower financing costs, enhancing demand for funds and reducing associated risks. With less job creation and lower incomes, consumers might seek more financing to sustain household spending.
- Mass Media: Increased demand for telecommunications services is expected due to greater digital usage.
BBVA projects a 2.1% growth for the services sector in Q1 2025, followed by 1.2% in Q2, 1.1% in Q3, and 1.6% in Q4.
Sector-wise Growth Projections
- Primary Sector: Anticipated growth of 2.6% in Q1, contraction of 1.3% in Q2, growth of 0.1% in Q3, and 0.6% in Q4.
- Secondary Sector: Projected contraction for the entire year.
According to the report, by 2025, Mexico City, Baja California Sur, and Quintana Roo are expected to lead growth, driven by service sectors such as commerce and tourism.
Key Questions and Answers
- What does the BBVA Mexico report highlight about the economic outlook? The report indicates a significant slowdown in overall economic activity, with both demand and supply sides experiencing deceleration.
- Which sector is projected to contribute the most to Mexico’s economy by 2025? The services sector, particularly financial services and mass media, is expected to be the largest contributor.
- What factors are driving growth in the services sector? Lower financing costs due to reduced reference rates and increased demand for telecommunications services driven by digital usage.
- Which regions and sectors are anticipated to lead growth in Mexico by 2025? Mexico City, Baja California Sur, and Quintana Roo are expected to lead growth, driven by commerce and tourism sectors.
