“It’s a game of one-eyed in the land of the blind,” is how Julio Ruiz, chief economist at Citi , described the current international trade landscape. During the presentation of Citi Mexico’s Economic Analysis , the executive considered that, while everyone, including Mexico, will implement some type of tariff, only those countries that are best positioned will be the most competitive .
In Mexico’s case, Ruiz indicated that if a new agreement is reached within the framework of the revised United States-Mexico-Canada Agreement (USMCA) by early 2026, the country could benefit from two key factors: first, the cost of tariffs, which in Mexico is around 10%, which is relatively low compared to other economies such as Asia ; and second, the highly integrated production chains between Mexico and the United States, which favors the country’s position in the US market.
The executive emphasized that despite the short-term headwinds, the medium-term outlook offers a positive outlook, provided the current economic uncertainty dissipates . He considered that investment decisions that had been paused could be resumed in a more favorable environment between 2026 and 2027.
The specialist emphasized the importance of waiting for clear definitions within the framework of the USMCA, and how this could represent an economic opportunity for Mexico in the future.
Economic Outlook for Mexico
During the presentation, the results of the Citi Expectations Survey were revealed , in which Mexico showed an upturn in growth projections for 2025, rising from 0.2% to 0.5% . However, a weak pace is expected to continue in the second half of the year, primarily due to global economic uncertainty and the slowdown in the United States.
In terms of inflation, the persistence of core inflation (which excludes goods and services with more volatile prices) outside the target range of the Bank of Mexico (Banxico) , which is between 2% and 4%, continues to worry analysts, who estimate that it will close the year at around 4.2% .
The resistance to the decline in this indicator is primarily due to two factors: on the one hand, goods inflation remains at historically average levels, which puts upward pressure on the underlying component; on the other, the expected slowdown in services inflation is not occurring.
Regarding the exchange rate, it was estimated that the peso will close 2025 at 18.77 pesos per dollar and by 2026 it will be at 20.10 pesos .
Citi’s analysis presents a mixed picture for the Mexican economy: persistent challenges in the short term, exacerbated by trade uncertainty, but also projects opportunities for the medium term, especially if the USMCA review is consolidated. US President Donald Trump has repeatedly stated that it will involve a renegotiation to attempt to modify the trilateral trade agreement.
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