Mexico's Economy: Navigating Uncertainty and Opportunities Ahead

The IMF forecasts a slowdown in Mexico's economic growth for 2025 but anticipates a slight rebound the following year. Trade tensions, fiscal vulnerabilities, and infrastructure gaps cloud the outlook, but strong US demand and positive trade agreements could bolster prospects. Structural reforms are recommended for stability.

In its recent assessment, the International Monetary Fund (IMF) has expressed concerns about a slowdown in Mexico's economic growth in 2025, followed by a modest recovery in subsequent years. The IMF emphasizes the need for fiscal and structural reforms to ensure long-term stability.

The report highlights trade tensions, infrastructure deficiencies, and fiscal vulnerabilities as significant challenges facing Latin America's second-largest economy. However, the IMF suggests that stronger-than-expected U.S. demand and favorable reviews of Mexico's trade agreements with Canada and the U.S. could improve the economic outlook.

The IMF projects a GDP growth of 1.0% this year, declining to 1.4% in 2024 and slightly increasing to 1.5% by 2026. It warns that public gross debt-to-GDP could rise significantly by 2030 if current policies persist, and recommends targeting a 2.5% fiscal deficit by 2027 to enhance fiscal credibility.

(With inputs from agencies.)