Tariff uncertainty, weak domestic consumption and a drop in investment will affect the Mexican economy, so the country’s Gross Domestic Product (GDP) would barely grow 0.4% in 2025 , estimated the Economic Commission for Latin America and the Caribbean (ECLAC) .
In presenting the Preliminary Overview of the Economies of Latin America and the Caribbean 2025 , the organization also projected that the Mexican economy could grow 1.3% in 2026 , due to factors such as greater trade certainty, as well as the possible ratification of the United States-Mexico-Canada Agreement (USMCA) and the positive effects of the World Cup on tourism.
At a press conference, José Manuel Salazar-Xirinachs, executive secretary of ECLAC, explained that low productivity growth, as well as lower investment and poor educational performance, are factors that prevent Mexico from achieving sustained growth.
“To increase its growth, Mexico must, among other things, scale up productive development policies, accelerate productive transformation, increase investment levels, and improve access to and quality of educational learning,” Salazar-Xirinachs explained.
Regarding the estimate for Latin America , ECLAC predicts that the regional GDP could reach 2.4% in 2025 and 2.3% in 2026 , which, if confirmed, would represent four years of low growth for the area.
According to the report, growth projections for 2025 and 2026 are influenced by uncertainty, mainly caused by tariffs around the world.
The report highlighted differences in the trajectories of economic activity at the subregional level, where South America would grow 2.9% in 2025 , driven by the recovery of Argentina, Bolivia and Ecuador after contractions in 2024. For 2026 a slowdown to 2.4% is projected , due to lower growth in most of its economies.
Central America is expected to grow by 2.6% this year , affected by weakening US demand, although an improvement to 3% is expected by 2026. However, vulnerabilities related to trade, remittances, access to financing, and exposure to climate change persist.
According to the preliminary assessment, the Caribbean would grow 5.5% in 2025 and 8.2% the following year , “bolstered by the significant growth of oil activity in Guyana, and supported by the normalization of tourism and improved performance in construction.”
According to the agency’s estimates, job growth will also lose momentum: 1.5% in 2025 and 1.3% in 2026. Meanwhile, regional inflation is expected to reach a median of 3% in 2026, higher than the 2.4% estimated for the end of 2025.
“The region has many assets for trading with the world, such as natural resources and productive capacities, but strategic policies are needed to realize the opportunities in Latin America and the Caribbean,” said José Manuel Salazar-Xirinachs.
The ECLAC executive secretary pointed out that the issue of uncertainty and volatility caused a lot of damage to emerging economies, and indicated that Latin America must diversify its markets and strengthen the ties with which it sustains trade exchanges .
“It is in Latin America’s best interest to diversify markets, investment, and trade, as this is necessary to achieve progress in their economies,” he noted.
ECLAC’s analysis warned that the region’s growth will depend on the dynamics observed in both global GDP growth and global trade. It will also be affected by the stance of monetary policy in the United States, uncertainty in international financial markets, and the potential volatility of external financing flows, including foreign direct investment and remittances, which could impact regional growth in 2026.
Among other factors, GDP growth can be affected by the performance of labor markets and their impact on household income.
In response, ECLAC urged strengthening and expanding the scope of macroeconomic policy .
José Manuel Salazar-Xirinachs argued that to escape the “low growth capacity trap”, more ambitious productive development policies are needed, combined with macroeconomic policies that move more resources towards growth, innovation, economic diversification, productive transformation and the creation of quality jobs.
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