Mexico’s 2025 Growth Forecast Cut to 0.89%, Lowest in a Year

Private sector economists have reduced Mexico’s economic growth forecast for 2025 to 0.89%, down from 1.07% projected in January, according to the latest survey from Mexico’s Central Bank (Banxico).

This marks the third consecutive downward revision and the lowest growth projection in at least 12 months. The new estimate is significantly below the 2.01% forecast made in early 2024 but remains slightly above the midpoint of Banxico’s projection range of 0.6%. Market consensus anticipates a 0.80% expansion, with some institutions, such as Banamex, predicting growth as low as 0.2%.

For 2026, analysts expect a modest recovery, forecasting 1.65% growth, down from the 1.75% projected in January. This marks the first downward revision of long-term growth expectations since early 2023.

Inflation is expected to close 2025 at 3.75%, within Banxico’s variability range but above its 3% target. This is the lowest inflation forecast in nine months, though marginally higher than the 3.73% estimate from May 2024. To manage inflation, analysts anticipate Banxico will maintain a restrictive monetary policy, with the benchmark interest rate ending the year at 8.19%, a 150-basis-point cut from the current 9.50%.

According to the survey, 92% of the 41 respondents believe the economy is performing worse than a year ago, and 53% expect further deterioration in business conditions. Additionally, 60% consider the current environment unfavorable for investment, while only 5% view it positively. Key concerns cited as obstacles to growth include governance issues, external conditions, and domestic economic uncertainty. Specific risks highlighted by respondents are public security concerns (20%), trade policy (16%), and economic uncertainty (9%).

The private sector’s projections remain well below the Mexican Finance Ministry’s official growth forecast, which estimates growth between 2% and 3% for 2025.