Introduction
On the upcoming Monday, I will publish my predictions for 2026. Before that, it’s essential to recall the forecasts I made on January 2, 2025, in “México 2025: Official Optimism, Real Risks.” As the saying goes, “the fact kills the story,” even when the story is mine.
Economic Growth and Employment
I began by citing the World Bank (1.5%) and S&P (1.2%) growth projections, stating that even with these numbers, the growth would be insufficient for formal employment and investment. The economy ended up stagnant, with the GDP barely advancing 0.4% annually in the first nine months of 2025. This slow growth hindered formal job creation.
Interest Rates
I erred in my prediction of interest rates. I forecasted the year-end rate to be between 8% and 8.25%. It closed at 7.00%. I underestimated how much Banxico could reduce rates with a stagnant economy, as they managed to do so even with underlying inflation persistently high: general inflation was 3.80% in November, and underlying inflation reached 4.43%.
Inflation
I accurately predicted general inflation, forecasting 3.76% and the actual November figure being 3.80%.
Exchange Rate
I was overly pessimistic regarding the exchange rate. I projected a range of 18.70 to 21 pesos per dollar, but the FIX on December 31 was 18.0012. There were fluctuations, such as when Trump threatened a 30% tariff starting August 1, causing the peso to drop to approximately 18.6790 in external markets.
Labor Market
I maintained that low unemployment is not positive if informality dominates. In November of the previous year, unemployment was 2.7%, but labor informality reached 54.8%, affecting 32.8 million people.
Trade and Protectionism
I anticipated tariffs to curb Chinese imports in textiles and apparel, stating the obvious: consumers would bear the cost. Temporary tariffs of 35% were imposed on many garment fractions, and 15% on certain textiles until 2026. The trade scope expanded with general increases (up to 35%) for imports from non-FTA countries, estimating an official $3.76 billion in additional revenue.
Fiscal Policy
I adhered to the official target: reducing the PIB deficit from 5.9% in 2024 to 3.9% in 2025 and achieving a primary surplus of 0.6%. The estimated close was 4.3%. Oil prices also didn’t help, as the assumption was $57.8 per barrel (versus $70.7 in 2024), and the Mexican Mix ended 2025 around $53.62.
Key Questions and Answers
- Did I accurately predict the economic growth? No, I underestimated the insufficient growth for formal employment and investment.
- How did my interest rate prediction compare to the actual rate? I underestimated Banxico’s ability to reduce rates despite a stagnant economy.
- What was my accuracy regarding inflation? I correctly forecasted general inflation, predicting 3.76% and the actual figure being 3.80%.
- How did my exchange rate prediction fare? I was overly pessimistic, as the peso performed better than anticipated.
- What were my labor market predictions? I accurately pointed out the issue of low unemployment amidst high informality.
- How did my trade and protectionism predictions hold up? I correctly anticipated tariffs on Chinese imports, though the impact on consumers was as expected.
- How did my fiscal policy predictions align with reality? I failed to meet the official targets for reducing the PIB deficit and achieving a primary surplus.
If I were to rate my performance as a forecaster in 2025, I’d give myself a 7/10. This places me above the media personality who issues sweeping statements without accountability and within the range of many financial institutions and analysis companies that also erred in PIB growth projections and were surprised by the interest rate closure and the peso’s strength. The difference is that here, in writing, I detail where I erred and why.
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