Mexico's 2025 Growth Forecast Cut to 0.6%

Mexico’s growth expectations for 2025 were reduced to 0.6%, according to Citi’s latest survey. This reflects a decrease from the previous forecast of 0.8%.

Analysts participating in the Citi Expectations Survey reduced the growth forecast for the Mexican economy in 2025 to 0.6%. Current economic uncertainty led analysts to establish a broad range for their estimates, between 0% and 1.3%. Over 30 participants project the GDP to remain below 1% this year. Institutions like Banamex, Itau BBA, and UBS forecast zero growth. For 2026, the GDP forecast also saw a marginal decrease, from 1.8% to 1.7%.

Saidé Salazar, Principal Economist, BBVA Research, mentioned the institution maintains its growth forecast at 1% for 2025, and they are awaiting greater clarity on the current situation, particularly regarding tariff issues, to adjust their projections.

Julio Ruiz, Chief Economist, Citi Mexico, indicated the institution maintains its growth projections at 0.5% for 2025 and 1.9% for 2026. However, he noted they will monitor the release of economic data next week, such as the IGAE, to assess the need to adjust these estimates. Ruiz also highlighted the influence of potential US tariff impositions on April 2, 2025, as a relevant uncertainty factor for the Mexican economy, as reported by El Financiero. 

Exchange rate projections were also modified, set at MX$20.98 per US dollar by the end of 2025. The general inflation expectation increased slightly, to 3.80% by the end of 2025. There is a general consensus among analysts regarding the likelihood of Banxico implementing a 50 basis point cut to the reference rate at its March 27, 2025, meeting.

Goldman Sachs has also revised its growth forecast for Mexico in 2025 downward, now estimating zero growth, from the previously projected 0.3%. The financial institution attributes this reduction to weak domestic demand and increased political and external uncertainty.

According to the Timely Indicator of Economic Activity (IOAE), a 0.7% annual decrease in the Mexican economy is projected for February 2025, following a 0.6% growth in January. This decline is largely attributed to the negative performance of industrial activity.

The business sector had previously expressed that uncertainty would dominate the Mexican economy during 2025. During the 85th General Assembly of the American Society of Mexico (AMSOC), Sofía Ramírez, Director General, México, ¿Cómo vamos?, warned about the effect of US tariffs on Mexico’s growth projections. "All growth estimates from the financial sector and international institutions are based on a scenario without tariffs. If tariffs are imposed, they could disrupt these projections. Uncertainty will define 2025 and 2026, and all growth, employment, and economic forecasts should be taken with caution,” she said.