Vanguard Forecasts 1.5% Mexico GDP Growth in 2026

Vanguard has issued a cautiously optimistic outlook for the Mexican economy in 2026, projecting GDP growth of 1.5%. While above the current market consensus, the forecast remains below pre-pandemic growth rates. The investment firm attributes the expected rebound to resilient consumer demand in the United States and a projected easing of global trade policy uncertainty.

Roger Aliaga-Díaz, Vanguard’s Chief Economist for the Americas and Global Head of Portfolio Construction, presented the findings at a conference in Mexico City. He noted that Mexico retains relative tariff advantages that continue to support manufacturing exports, particularly in the automotive and electronics sectors.

Trade and Macroeconomic Stability

Although uncertainty surrounding the USMCA review has weighed on recent investment decisions, Aliaga-Díaz expressed confidence in the process. “We believe the process will turn out well and that this uncertainty will dissipate in the second half of the year,” he said.

Vanguard’s Economic and Market Outlook 2026 identifies a combination of domestic drivers and headwinds for growth. Economic activity is expected to benefit from increased tourism spending linked to the FIFA World Cup and a substantial minimum wage increase affecting 8.5 million workers. However, a cooling labor market and lower remittance inflows are likely to temper the recovery.

Fiscal Policy and Structural Reform

Vanguard’s analysis indicates that federal fiscal policy is focused on consolidation rather than stimulus. The report projects a primary fiscal surplus of 0.5% to 0.6% of GDP and a debt-to-GDP ratio of around 52%. This fiscal stability, however, comes at the expense of public infrastructure investment, placing greater responsibility for growth on the private sector.

Aliaga-Díaz emphasized that while the economic cycle in 2026 appears stronger than in the previous year, sustained long-term growth will depend on structural reforms. He highlighted education, energy and regulatory frameworks as key areas for improvement.

Vanguard, one of the world’s largest investment management firms and headquartered in Pennsylvania, operates its Mexico and Americas division under the leadership of Juan Hernández. The 2026 outlook also includes an in-depth analysis of artificial intelligence and its potential impact on global productivity.

Goldman Sachs Projects Slower Growth

According to Goldman Sachs’ annual report, Latin America Economic Outlook 2026: Stuck Again in Modest Performance, Mexico’s GDP is expected to expand by 1.3%.

If realized, this would mark an acceleration from the estimated 0.3% growth in 2025. Even so, economists anticipate that Mexico will underperform the regional average growth rate of 1.9% for a second consecutive year. Alberto Ramos, Goldman Sachs’ Chief Economist for Latin America, attributed the modest outlook to limited fiscal support, ongoing uncertainty in trade relations with the United States and domestic political risks.

Inflation is expected to remain above central bank targets in 2026. Goldman Sachs forecasts inflation of 4.3% for Mexico, in line with projections for Brazil. To cushion potential external shocks, the firm considers Mexico’s international reserves to be adequate. Mexico’s Central Bank (Banxico) reported reserves of US$251.8 billion as of Dec. 31, 2025, following a record accumulation of US$22.8 billion over the previous year.

Banxico’s own projections are broadly aligned with those of the investment bank, placing GDP growth in 2026 at 1.1%, within a range of 0.4% to 1.8%. The central bank also introduced a preliminary forecast for 2027, projecting a recovery to 2% growth as trade-related uncertainties begin to ease.