Uncertainty has arisen regarding the projected increase in public spending for the year 2024, while the staff at the Bank of Mexico lowered their growth forecast for 2025 from 1.2% to 0.6%. Some specialists suggest that Mexico could be on the brink of a recession.
In Mexico, unlike most countries where accrual spending is reported, fiscal accounting is done on a cash basis, which relates to the increase in the deficit in 2024. Despite economic activity growing by 1.5% during that year, compared to 3.3% in 2023, a notable deceleration is observed.
Most of the public works inaugurated by former president López Obrador were concentrated at the end of 2023 and the beginning of 2024, influencing the economic growth of those years. Additionally, due to factors such as the accounting of public spending in Mexico, public investment data show a decrease in 2024.
During the first year of a new administration in Mexico, a significant deceleration in economic growth is usually observed. Despite the fiscal consolidation measures implemented by the government, it is expected that they will not significantly impact current economic activity, as they were already experienced in the previous year.
The current economic landscape presents statistical irregularities that complicate precise projections, such as the increase in public spending and the contraction in public investment. Furthermore, external factors, such as the global post-pandemic manufacturing situation, may influence the Mexican economy without necessarily being indicative of an imminent recession.
