Mexico’s Economic Activity Rose 1.6% YoY in October

Mexico’s economic activity grew 1.6% year over year in October, driven mainly by a sharp expansion in the primary sector. The Global Indicator of Economic Activity (IGAE)—a monthly proxy for GDP—also posted a 1% month-over-month increase, rebounding from a 0.4% contraction in September, according to data released Monday by the National Institute of Statistics and Geography (INEGI).

Primary activities, which include agriculture and livestock, rose 1.4% on a monthly basis. On an annual basis, the sector expanded 11.8%, making it the strongest contributor to overall economic growth.

Industrial activity increased 0.7% month over month, ending a four-month streak of declines. Electricity generation, transmission, and water supply grew 1.7% year over year, while construction output rose 1.5%, supported by a faster-than-expected rollout of public infrastructure projects.

In contrast, manufacturing output declined 1.4% annually, reflecting ongoing headwinds from weaker global trade and soft industrial demand.

The services sector, which accounts for the largest share of Mexico’s GDP, grew 1.2% month over month and 2.5% year over year.

Professional, scientific, and technical services expanded 7.5%, while business support and waste management services rose 9.3%. Cultural and sports services increased 5.7%. Meanwhile, temporary accommodation and food services were among the few segments to contract, falling 2.5% and 1.9%, respectively.

Despite the October rebound, analysts and Mexico’s central bank (Banxico) expect economic activity to remain subdued through the end of 2025. Banxico recently cut its benchmark interest rate to 7.0%, citing persistent core inflation and a slowdown in global economic growth.

The OECD and other organizations project that Mexico’s GDP will close the year with growth of around 0.7%, down from the 1.5% expansion recorded in 2024, amid high interest rates, fiscal consolidation, and ongoing uncertainty in international trade.