In recent months, expectations for economic growth in Mexico have been affected. According to the monthly survey conducted by the Bank of Mexico among private sector experts, the growth forecast for this year has decreased significantly, from 2.40% in January to 1.46% in September. For 2025, the estimate has dropped from 1.94% to 1.20%. However, recently there has been an encouraging data point that could lead to a slight upward revision in economic forecasts for 2024.
INEGI reported yesterday that the Gross Domestic Product (GDP) for the third quarter grew by 1.5%, surpassing expectations. With this data, the average annual GDP growth rate stands at 1.8% for the first three quarters of 2024. Although this growth is not cause for celebration, it represents a greater resilience of the Mexican economy to the expected deterioration.
This positive change is attributed, in part, to the agricultural sector, which grew by 3.8% annually in the third quarter, offsetting previous negative results. On the other hand, the industry experienced a growth of 0.5%, avoiding negative forecasts, and the tertiary sector also outperformed expectations, with an increase of 1.9%. Despite these improvements, Mexico still lags behind its main trading partner, the United States, which recorded a growth of 2.8%.
It is important to note that current results do not guarantee better performance for 2025. For example, Citibanamex raised its growth forecast for this year to 1.5%, but maintained it at a scant 0.8% for the next year, citing adjustments due to the change of government in Mexico and the U.S., high interest rates, and increased political uncertainty.
Regarding the dollar, the volatility of the U.S. currency has increased as the elections in the U.S. approach. The closing price yesterday showed a dollar at 20.16 pesos, the highest level since 2022, due to uncertainty surrounding the election results. Volatility is expected to persist until reliable results are available after the elections.
