The Mexican economy is facing a slowdown due to the cooling of internal demand and high uncertainty. Experts from Citibanamex and Ve por Más expect private consumption to remain solid in the coming months, supported by employment stability and rising wages. However, Inegi's projections differ, reflecting the complexity of the situation.
The governor of Banxico, Victoria Rodríguez, pointed out that the agricultural sector has experienced significant declines due to droughts, while the industry shows a loss of dynamism, especially in construction. The IMF has revised its forecasts downwards for 2024 and 2025, predicting Mexican GDP growth of only 1.5% this year and 1.3% next year, reflecting the weakening of internal demand and the economic measures adopted.
Sheinbaum rules out that the USMCA is at risk and anticipates a deficit of 3.5% for 2025. However, the IMF predicts that annual inflation will rise to 4.7% in 2024 and settle at 3.8% for 2025, making it difficult for Banxico to reach its 3% target. Strong wage growth will be a hurdle to reducing inflation in the short term.
INEGI reported a contraction in economic activity during August, with declines in the agricultural and industrial sectors. A slight recovery in manufacturing is expected, but a greater slowdown in gross fixed investment due to uncertainty. Experts also highlight concerns about institutional adjustments and the electoral process in the US.
The Mexican peso remains under pressure as the elections in the US approach, trading near 20 pesos per dollar. Sheinbaum has conveyed messages of confidence about the Mexican economy and ruled out that the USMCA could be in jeopardy. On the other hand, the services sector has shown a 2.2% increase, despite the widespread slowdown in other sectors.
