Mexico’s 2026 GDP Expected to Grow 1.3% Amid Challenges

Mexico’s economic outlook for 2026 shows modest improvement, although structural and external challenges continue to constrain growth. Estimates from global investment bank Goldman Sachs indicate that the country’s GDP is expected to expand by 1.3% next year.

If realized, this would represent an acceleration from the estimated 0.3% growth recorded in 2025. Even so, Goldman Sachs economists caution that Mexico is likely to underperform against the regional average for a second consecutive year. In its annual report, Latin America Economic Outlook 2026, titled Stuck Again in Modest Performance, the firm forecasts regional growth of 1.9%, highlighting Mexico’s comparatively weaker momentum.

The report attributes this subdued outlook to several persistent constraints, including limited fiscal support, uncertainty in trade relations with the United States, the outcome of the USMCA review, and domestic political risks. Together, these factors continue to dampen spending and investment decisions, according to Alberto Ramos, Goldman Sachs’ Chief Economist for Latin America.

The analysis also identifies remittances as a growing vulnerability for Mexico’s economy. Ramos noted that stricter US policies are expected to weigh on remittance flows in 2026, increasing the country’s exposure to external shocks. Among Latin America’s seven largest economies: Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, and Peru, sensitivity to global disruptions is influenced by trade exposure, commodity prices, remittances, and global financial liquidity.

Despite these pressures, Goldman Sachs considers Mexico’s international reserves sufficient to absorb potential shocks. Banco de México recently reported reserves of US$251.8 billion as of Dec. 31, 2025, following a record accumulation of US$22.8 billion during the year.

The report also highlights that Mexico is likely to continue facing inflation above central bank targets, alongside Brazil and Colombia. Goldman Sachs projects inflation rates of 4.3% for Mexico and Brazil, and 5.2% for Colombia.

On trade policy, Goldman Sachs does not anticipate major changes in US tariffs in 2026 or 2027, coinciding with the US electoral cycle. The firm expressed confidence that USMCA will be renewed, likely with stricter rules of origin and tighter import controls, particularly for goods from China. A successful revision could also allow for partial reductions in tariffs on Mexican exports to the United States. Historically, tariffs applied only to products that failed to meet rules of origin, prompting Mexican producers to adjust compliance processes and increase the share of exports eligible for preferential treatment.

In line with Goldman Sachs, Banxico recently projected 2026 GDP growth of 1.1%, within a range of 0.4% to 1.8%. For the first time, the central bank also shared a 2027 forecast, anticipating 2% growth with a potential range of 1.2% to 2.8%.