Mexico Underperforms Against Regional Growth: ECLAC

Mexico is expected to underperform against the Latin America and Caribbean region for a second year in a row, based on projections from the Economic Commission for Latin America and the Caribbean (ECLAC). Economic growth across Latin America and the Caribbean is expected to reach 2.4% this year, compared with an estimated expansion of just 0.4% in Mexico, where trade uncertainty and domestic headwinds continue to weigh on activity.

“This slowdown is mainly explained by a sharp decline in consumption and investment, as well as uncertainty surrounding access to the United States market, which has negatively affected investment announcements and their execution,” said José Manuel Salazar-Xirinachs, Executive Secretary, ECLAC. “Despite the Mexican government’s effective negotiation efforts, the level of uncertainty has been significant for an economy that is highly integrated and exports more than 80% of its goods to the United States.”

As explained by the official, only Bolivia and Mexico are expected to register marginal growth this year, ranging between 0% and 0.5%, narrowly avoiding contraction. Salazar-Xirinachs added that private consumption grew by just 0.1% year-on-year between January and September, coupled with higher unemployment and a 5.1% decline in remittances, along with a 7.3% drop in gross fixed investment. He pointed out that during the same period in 2024, gross fixed investment had increased by 6.6%.

From his perspective, “this decline was driven by a 32% reduction in public investment, as well as weakening supply chains.” Looking ahead to 2026, ECLAC expects Mexico’s economy to grow by 1.3%, reflecting a gradual improvement supported by the prospect of greater trade certainty. “It is expected that USMCA will be ratified by the end of next year, and there will also be positive effects from tourism. This is not anecdotal but a real phenomenon; when countries host World Cup events, they receive substantial inflows from tourism and consumption, which will add to Mexico’s economic growth,” Salazar-Xirinachs emphasized.

To boost economic growth, the ECLAC Secretary recommended that Mexico scale up productive development policies, accelerate productivity gains, increase investment levels, and improve both access to and the quality of education and learning outcomes.

In 2024, the economies of Latin America and the Caribbean recorded average GDP growth of 2.3%, exceeding Mexico’s 1.4% expansion that year.

Mexico’s 2025 Forecast

ECLAC’s projections align with assessments from other institutions.  Recently, Banxico has cut its growth forecast for the Mexican economy in 2025 to 0.3%, down from the 0.6% projected three months ago, Governor Victoria Rodríguez reported. She explained that the revision reflects a deeper-than-expected contraction in economic activity during 3Q25.

Presenting the Quarterly Report for June to September, Rodríguez said that Banxico now expects GDP growth in 2025 to range between 0.1% and 0.5%, compared with the previous 0.1% to 1.1% estimate. Looking further ahead, the central bank projects that the economy will expand by 1.1% in 2026, within a range of 0.4% to 1.8%. For the first time, Banxico also shared a 2027 GDP forecast, anticipating growth of 2% with a potential range of 1.2% to 2.8%.

Banamex also pointed out that Banxico’s 2025 growth projection of 0.3% falls below analysts’ 0.5% estimate, while the 2026 forecast of 1.1% is below the market’s 1.4% expectation.