IMF Raises Mexico 2025 Growth Forecast to 1%, Sees 1.5% in 2026

The International Monetary Fund (IMF) has raised its growth forecast for Mexico to 1% in 2025, up from its previous estimate of 0.2%, and projects a 1.5% expansion in 2026.

In its concluding statement under Article IV on Mexico, the IMF noted that fiscal consolidation, restrictive monetary policy, and trade tensions with the United States have weighed on consumption and investment, while exports have remained resilient. Stronger-than-expected US demand and clarity on tariffs were identified as key upside risks.

The IMF recommended that Mexico avoid trade-distorting measures, such as recent import tariffs, to sustain growth. “Expanding and diversifying partnerships with trading partners would further strengthen Mexico’s position in global supply chains,” the report stated.

Long-term growth, according to the IMF, depends on closing infrastructure gaps, reinforcing the rule of law, and deepening trade integration. The fund emphasized prioritizing investment in energy, transport, telecommunications, and water, highlighting the role of private sector participation. It added that improving the investment climate will require clearer regulations and streamlined procedures, particularly following recent legal reforms and the elimination of independent regulatory agencies.

On fiscal policy, the IMF projected Mexico’s fiscal deficit at 4.3% of GDP this year, above the programmed 3.9%, and estimated that gross public debt could reach 61.5% of GDP by 2030. It called for a more ambitious short-term consolidation path to strengthen fiscal credibility and create space for countercyclical spending in the event of external shocks.

The IMF advised preserving social spending and growth-oriented public investment while mobilizing additional revenues through administrative improvements and tax policy changes, including increasing the progressivity of personal income taxes, eliminating tax expenditures, and expanding carbon and mining royalties.

The fund also highlighted the need to strengthen the financial sustainability of state-owned enterprises Pemex and CFE, welcoming recent plans to improve their performance.

Finally, the IMF raised concerns about the autonomy of Mexico’s judiciary and regulatory institutions, pointing to the recent elimination of independent bodies as an issue requiring attention.