Based on current data, the Mexican economy is more in a state of stagnation than recession. An analyst recalled that at the beginning of the year, the consensus forecast was more pessimistic: "For such a complicated scenario, we expected a recession, however, the estimated growth for 2025 is now 0.5%," she said. Although the data is slightly better than the market's initial estimate, it remains well below the forecasts of the Ministry of Finance and Public Credit (SHCP), which estimated 1% growth by the end of the year. The analyst explained that the main factor for this stagnation is related to uncertainty surrounding the trade policies of Donald Trump, mainly affecting gross fixed investment. In detail, the most affected sector is construction, which has seen 12 months of declines, particularly non-residential construction, which has plummeted 27% so far this year. On the contrary, manufacturing exports are again the lifeline to prevent the economy from falling into recession, with an advance of 7.5% in the third quarter of the year, mainly due to the 13.6% growth in non-automotive exports. Of these, those sent to the United States grew by 12.8%, while those directed to the rest of the world grew by 11%. Thus, so far this year, the economy shows a growth of only 0.4%. In addition, the first figures from the last quarter of the year also point to stagnation in October, mainly due to the persistent drop in industry and investment, which has already been in negative territory for several months. This percentage is very close to 0%, a condition that should be considered as economic stagnation. "We cannot talk about a recession considering that there are several criteria that would have to be met to consider that state; among them is how deep, how widespread and prolonged the contraction is," assured Janneth Quiroz, director of economic analysis at Monex, at a conference this Tuesday. The analyst explained that none of these elements are currently observed, although there is a scenario of stagnation due to the weakness of domestic demand, the reduction of public spending and the deceleration of the US economy. The fall in GDP reactivates the ghost of a technical recession. Last Friday, INEGI confirmed that the economy showed a quarterly contraction of 0.3% from July to September and an annual contraction of 0.2%, which opened the debate on recession, along with a series of cuts to the GDP forecast for the end of the year. Analysts at Grupo Financiero Monex ruled out that Mexico is in a recession scenario despite the setback recorded by the Gross Domestic Product (GDP) in the third quarter of the year and the fact that, internally, some sectors have accumulated up to a year in negative territory.
