The Bank of Mexico (Banxico) presented its Quarterly Report corresponding to October-December, estimating that Mexico's economic growth at the end of this year will be a little more than one-third of what is observed in 2024. In comparison, the expected growth for 2025 is set at 0.6 percent, with a range between -0.2 and 1.4 percent. This projection is lower than the previous one, reflecting an environment of high uncertainty, both due to external and internal factors, according to Julio César Ruiz, chief economist at Citi for Mexico.
The current scenario reflects a slowdown in the Mexican economy, due to the uncertainty associated with U.S. trade policy, changes in the internal institutional framework, and a potential slowdown in the U.S. economy. These variables influence the projection of economic growth for Mexico. This uncertainty could also lead to a lower inflation risk, allowing Banxico to continue with cuts to the reference rate, as it did in early February.
The risks to current economic growth are related to uncertainty in U.S. external policies and internal factors. A key point is the possible implementation of trade policies in the U.S., which could impact external and internal demand for Mexico. These variations would affect aspects such as private consumption and investment in the country.
The Citi Expectations Survey of February 20 reflects a reduction in estimates of Mexican GDP growth for 2025, placing it at 0.9 percent, compared to the 1.0 percent forecast made two weeks ago. The fluctuation in these forecasts reflects the uncertainty and risks associated with the current economic landscape, highlighting the importance of both internal and external factors in Mexico's economy.
