New economic data casts a shadow on Mexico’s recent rosy growth forecasts

The IMF and the OECD precocious upgraded their economical maturation forecasts for Mexico successful 2025, but the nationalist statistic bureau INEGI delivered immoderate atrocious quality this week: The system contracted successful yearly and month-over-month presumption successful July.

Weighed down by anemic superior and secondary assemblage activity, the Mexican system declined 1.2% annually successful July and 0.9% compared to June, INEGI reported.

The secondary sector, which includes manufacturing and construction, besides showed a anemic show successful July, but little truthful than the superior sector. (Cuartoscuro)

In the archetypal 7 months of the year, GDP accrued conscionable 0.1% compared to the aforesaid play of 2024.

The yearly contraction successful July was the worst show for the Mexican system successful immoderate period since February 2021.

The month-over-month contraction was the worst sequential effect since April 2024.

Analysts from the Monex fiscal radical said that the economical effect for July was “weaker than anticipated” and reinforced “signs of cooling successful economical activity” successful Mexico.

INEGI published its economical information for July connected Tuesday, the aforesaid time that the Organization for Economic Cooperation and Development raised its 2025 maturation forecast for Mexico to 0.8% from 0.4%. Last week, the International Monetary Fund revised upward its 2025 maturation forecast for Mexico to 1% from a prediction successful April of a 0.3% contraction.

Primary assemblage plunges 12.2% annually, secondary assemblage contracts 2.8%

INEGI’s information shows that Mexico’s superior sector, which includes agricultural, forestry and sportfishing activities, contracted 12.2% successful July compared to the aforesaid period of 2024.

The secondary sector, which includes manufacturing, construction, mining and energy procreation and distribution, shrank by 2.8% annually.

The tertiary oregon services assemblage was the lone assemblage to grow, expanding 0.4% compared to July 2024. Still, that level of maturation was the weakest successful 4 months for Mexico’s ample services sector.

On a month-over-month basis, each 3 sectors contracted successful July. The superior assemblage declined 3%, the secondary assemblage contracted 1.2% and the tertiary assemblage shrank by 0.4%.

In the archetypal 7 months of the year, the superior assemblage grew 2%, the secondary assemblage contracted 1.5% and the tertiary assemblage expanded 0.8%.

Gabriela Siller, manager of economical investigation astatine Banco Base, said that the “poor show of the secondary sector, peculiarly successful operation and manufacturing, presents a important hazard for employment.”

The operation assemblage contracted 4.1% annually successful July and 1.2% connected a month-over-month basis. The sector’s mediocre show was attributed successful portion to the alteration successful authorities spending connected infrastructure projects.

OECD follows the IMF successful lifting Mexico’s economical maturation outlook for 2025

The manufacturing assemblage declined 1.8% annually successful July and 1.6% compared to June.

The important contractions of the superior assemblage successful July didn’t astonishment the main economist astatine the brokerage steadfast Valmex.

“Primary [sector] activities are characterized by being precise volatile, with abrupt declines followed by crisp upturns, reflecting their precocious vulnerability to climatic and seasonal factors,” Gerónimo Ugarte said.

The month-over-month diminution successful the tertiary assemblage was attributed to factors including the diminution successful inflows of remittances and a wetter-than-normal rainy play successful assorted parts of the country.

The outlook for the remainder of the year

Banamex analysts expect that the Mexican system volition stay anemic successful the coming months. In a written analysis, they forecast that GDP volition diminution 0.2% successful the 3rd 4th of 2025 compared to the erstwhile three-month period.

The Banamex analysts are predicting that the Mexican system volition turn 0.4% successful 2025, connected par with the forecast of the brokerage steadfast Vector.

Mexico’s Finance Ministry is forecasting maturation of betwixt 0.5% and 1.5% this year.

Uncertainty created by the United States’ volatile commercialized argumentation has affected the Mexican system successful 2025, though Mexican exports to the U.S. person continued to grow.

The USMCA escaped commercialized pact volition beryllium reviewed successful 2026. The completion of the reappraisal process should supply greater certainty for the Mexican system and investors successful the years ahead.

With reports from El Financiero and El Economista