OECD Lifts Mexico’s 2025 Growth Forecast Amid Export Resilience

The Organization for Economic Co-operation and Development (OECD) revised upward its economic outlook for several countries, including Mexico, in its September 2025 Interim Report, reflecting stronger-than-expected resilience in exports despite a volatile global trade environment.

The OECD now projects Mexico’s GDP will expand by 0.8% in 2025, double the 0.4% growth forecast issued in June, and far stronger than its March projection of a 1.3% contraction, which anticipated a recession. The adjustment underscores the role of Mexico’s external sector as a stabilizing force, even as global markets contend with trade frictions and rising tariffs.

Inflation Outlook Adjusted

On the inflation front, the OECD raised its forecast for Mexico to 4.2% in 2025, up from its previous estimate of 3.4%, reflecting persistent cost pressures. While inflation remains above the central bank’s target, the OECD expects gradual moderation in the coming years as part of a broader trend among G20 emerging markets. By 2026, headline inflation in these economies is projected to decline to 3.1%, with Mexico contributing to this disinflation alongside Brazil, Argentina, and Türkiye.

The OECD highlights diverging inflation dynamics across major economies:

• In the United States, higher effective tariff rates are expected to keep annual inflation above target through 2026, with businesses increasingly passing on costs to consumers.

• The euro area is expected to see subdued inflation, while in Japan, food price normalization should bring inflation closer to the Bank of Japan’s target by 2026.

• Among G20 advanced economies, headline inflation is projected at 2.5% in both 2025 and 2026, with core inflation broadly stable.

Monetary Policy Implications

Policy rate adjustments are also anticipated across economies. The OECD foresees rate cuts in Mexico, Brazil, and Türkiye as inflationary pressures moderate, contrasting with more cautious stances in advanced economies. In the euro area, rates are expected to remain stable, while Japan is projected to gradually withdraw monetary accommodation.

For Mexico, lower interest rates could provide additional support to domestic demand in 2026, complementing the ongoing momentum from trade.

Outlook

Mexico’s upward revision reflects a cautiously optimistic turn for Latin America’s second-largest economy. While inflation remains a challenge, the OECD’s forecast suggests that resilient exports and easing monetary policy could pave the way for more stable growth ahead.