Once it recovers from the sharp increase in uncertainty regarding trade policies and companies adapt to the new trading environment, the Mexican economy could expand by 1.3% in 2026 , the World Bank (WB) projected , which would mean a downward forecast compared to a previous estimate by the multilateral organization that pointed to a growth of the country’s Gross Domestic Product (GDP) of 1.4 percent.

According to the  World Bank’s World Economic Outlook report , Mexico’s GDP would grow by 1.8% in 2027.

The projections for Mexico occur in a context where the review of the United States-Mexico-Canada Agreement (USMCA) is on the horizon , as well as constant changes in global trade policy, derived from US tariffs.

Meanwhile, growth in Latin America and the Caribbean is expected to rise slightly to 2.3% in 2026 , “as trade tensions and the uncertainty they entail remain high and domestic demand remains low in some countries, which will partially offset the positive effect of the easing of financial conditions.”

According to the World Bank document, regional growth will consolidate at 2.6% in 2027, as trade flows recover and domestic demand improves.

For the Caribbean, the World Bank estimated that GDP will increase to 5.2% in 2026 and 6.6% in 2027 , driven by Guyana’s current oil boom. “Excluding Guyana, the subregion is projected to grow by around 2.9% and 3.7%, thanks to tourism and related services,” it stated.

In Central America, economic growth is projected to remain generally stable at 3.6% in 2026 and 3.7% in 2027. “According to projections, remittance flows will decline, negatively impacting economic activity. On the positive side, the subregion is expected to continue benefiting from resilient exports and growth in the United States.”

Regarding the US economy, the organization predicted growth of 2.2% for this year and 1.9% for 2027 .

In Europe and Central Asia, growth is projected to remain stable at 2.4% in 2026 before rising to 2.7% next year. According to the World Bank, GDP in East Asia and the Pacific will slow to 4.4% in 2026 and 4.3% in 2027. Meanwhile, South Asia is expected to grow by 6.2% this year and then potentially recover to 6.5% in 2027.

According to the analysis, global growth is estimated to remain stable over the next two years, with a slight drop to 2.6% in 2026 before increasing to 2.7% next year.

“The global economy is proving to be more resilient than anticipated, despite persistent trade tensions and policy uncertainty,” the report highlighted.

According to the World Bank, the easing of global financial conditions and fiscal expansion in several large economies should help cushion the slowdown.

“To avoid stagnation and unemployment, governments in emerging and advanced economies must vigorously liberalize private investment and trade, curb public consumption, and invest in new technologies and education,” stressed Indermit Gill, chief economist and senior vice president for Development Economics at the World Bank Group.

Mexico, which maintains close economic ties with the United States, is particularly vulnerable to new tariff increases , which could worsen if there were more trade restrictions stemming from the negotiation of the USMCA, which Donald Trump, the president of the United States, has long scorned.

Just last January 13, the White House occupant declared that the USMCA was “irrelevant” and insisted that the United States does not need vehicles made in the country, to which the president of Mexico, Claudia Sheinbaum, ruled out entering into debate in the morning conference this Wednesday, since both economies are very integrated .

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El cargo World Bank “cuts the Mexican economy” by 2026 apareció primero en T21.

The Mexican Business Council for Foreign Trade, Investment and Technology (Comce) presented its vision on the economic and trade landscape that Mexico will face in 2026, a year marked by the review of the United States-Mexico-Canada Agreement (USMCA) , the advance of nearshoring (relocation of production lines) and the recomposition of global value chains

During the meeting, Susana Duque, general director of Comce, highlighted that the country is closing the year with solid economic foundations that support its strategic role in global trade.

“Mexico is today the 13th largest economy in the world, the tenth largest exporter and importer, and a country where 90% of exports come from manufactured goods,” he highlighted.

That industrial strength, he said, has allowed the country to consolidate its position as the main trading partner of the United States and as a relevant destination for new investments.

Duque recalled that Mexico recently reached a record for Foreign Direct Investment (FDI) , with 40.906 billion dollars (USD), a figure that reinforces global confidence in the country and stressed that in 2025 there was growing interest in productive integration, energy transition, digitalization of trade and relocation of operations, factors that will continue to shape the economic agenda for next year.

For his part, Sergio Contreras, executive president of Comce, presented the macroeconomic projections for 2026.

For next year, the agency anticipated a Gross Domestic Product (GDP) growth of 1.29% , while inflation was expected to be around 3.9%, after a decline compared to 2024.

Regarding exports, Comce estimated a close of 660 billion dollars for 2025 and a projection of 700 billion dollars for 2026, despite a global environment that could slow down.

Contreras pointed out that Mexico is maintaining a steady progress that could even raise it from the tenth to the ninth largest exporter in the world.

Contreras emphasized that the country remains the fifth largest recipient of FDI globally, according to international estimates. The United States contributes approximately 40% of these flows, followed by Spain, Japan, the Netherlands, and Canada.

By 2026, Comce projected between $40 billion and $45 billion in FDI, driven by global industrial repositioning, the relocation of companies ( nearshoring and friendshoring ), the broad Mexican manufacturing base , and the possibility of co-investments between Mexican and international firms.

The manufacturing sector accounts for 37% of recent FDI, followed by financial services, trade, transport and construction.

Contreras highlighted that Mexico’s manufacturing structure, supported by a highly skilled workforce, particularly in STEM areas (science , technology, engineering and mathematics ) , continues to be the pillar of foreign trade.

Sectors such as automotive, electrical-electronic, machinery, medical devices and digital technologies will continue to lead export flows.

Among the factors with the greatest potential for 2026, Comce identified nearshoring and international co-investment, given the reconfiguration of tariffs and global chains; the energy transition, which will attract new megaprojects; regional value chains, especially in North America; as well as diversification towards the European Union (EU), with the modernization of the EU-Mexico trade agreement.

In the automotive sector, he emphasized that 42% of the US industry depends on Mexican auto parts and manufacturing , evidence of a deep integration that will be a determining factor in the review of the USMCA.

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At the start of 2025, the Mexican economy technically avoided a recession thanks to a slight rebound in GDP (0.2%) , but it shows clear signs of a generalized slowdown, said Alejandro Saldaña, chief economist at Grupo Financiero Ve por Más (Bx+) , during the webinar Advantages for Mexico in a Changing Environment .

“The fact that we’re not in a recession doesn’t mean the economy is healthy. There’s weakness in virtually every sector, except for agriculture and some food-related manufacturing and exports,” he noted.

He explained that the rebound in Mexican exports in the first quarter was largely due to an advance in shipments to the United States following President Trump’s announcement of new tariffs, which generated a temporary positive effect on the industry.

From a spending perspective, the slowdown is more evident, as private consumption, especially of imported goods, has cooled after two years of strong growth.

“Consumers have become more cautious due to slower job creation, persistent inflation, and economic uncertainty,” Saldaña noted.

Gross fixed investment also weakened, especially in public construction, affected by the completion of flagship projects from the previous six-year term and a fiscal consolidation policy that cuts programmable spending.

On the other hand, the specialist indicated that private investment , although more stable, also shows signs of cooling.

In this sense, with a fiscal deficit that the Treasury is seeking to aggressively reduce this year, and without significant surpluses from the Bank of Mexico (Banxico) , the space for fiscal stimulus is narrow.

On the monetary side, although Banxico has begun to reduce rates, Saldaña warned that the scope for further cuts is limited.

“Inflation remains far from the 3% target, with upside risks from the exchange rate, higher labor costs, and low productivity. This forces the central bank to maintain a relatively restrictive stance for longer,” he said.

Despite the complex outlook, the Bx+ economist emphasized that Mexico maintains solid macroeconomic fundamentals : prudent fiscal policy, the autonomy of the Bank of Mexico, robust international reserves, and a relatively balanced current account.

Furthermore, on the trade front, Mexico benefits from greater relative competitiveness against China in the US market, due to lower effective tariffs and the depreciation of the peso, which has absorbed some of the external shocks.

“Although uncertainty persists, especially due to U.S. trade policy and possible internal institutional changes, Mexico retains anchors that help navigate the volatile environment,” he emphasized.

Likewise, despite the slowdown in activity, Saldaña said the labor market remains stable, with an unemployment rate of just 2.6% and real wages on the rise.

This could sustain basic consumption in the short term, although structural risks persist due to rising labor costs without equivalent improvements in productivity.

“The cost per worker has risen, while output per worker has fallen. This puts pressure on inflation and complicates monetary policy decisions going forward,” he explained.

Forecasts for 2025

Ve por Más estimates that GDP will grow just 0.5% in 2025. Inflation could stagnate around 3.8%, while the benchmark interest rate could close slightly below 8%; and the exchange rate, for its part, could consolidate above 20 pesos per dollar.

“An economic recovery will depend on greater clarity in the trade outlook and a sustained reduction in uncertainty, which could revive investment, employment, and consumption toward the end of the year,” Saldaña concluded.

In this context, Bx+ analysts reiterate their target price for the S&P/BMV IPC (Price and Quotation Index) at 61,969 points by the end of 2025, supported by expected earnings growth of 6.5% and a valuation that remains competitive compared to other global markets.

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The World Bank (WB) estimated that Mexico will have an economic growth of just 1.5% for 2025 and 1.6% for the following year, limited by the application of a restrictive monetary policy and fiscal consolidation , so it estimated that developing economies, which drive 60% of global growth, will end the first quarter of the 21st century with the weakest long-term growth prospects since 2000.

The organization revealed this in its World Economic Outlook report , in which it predicts that the global economy will grow by 2.7% in both 2025 and 2026, at the same pace as the previous year.

The World Bank said that growth in developing economies is also expected to remain stable at around 4% over the next two years. “However, this would be a weaker performance than before the pandemic, and insufficient to foster the progress needed to alleviate poverty and achieve broader development goals,” it stressed.

He said that even if the global economy stabilises over the next two years, developing economies are expected to move more slowly to catch up with the income levels of advanced economies.

The Washington-based organization said that the performance of developing economies would be weaker than before the COVID-19 pandemic, and insufficient to promote the progress needed to alleviate poverty and achieve broader development goals.

“The next 25 years will be more difficult for developing economies than the last 25,” said Indermit Gill , chief economist and senior vice president for development economics at the World Bank Group .

The World Bank noted that global economic integration “faltered,” resulting in overall economic growth falling from 5.9% in the 2000s to 5.1% in the 2010s and 3.5% in the 2020s.

According to the analysis, developing economies are now more important to the global economy than they were at the beginning of the century, accounting for around 45% of global GDP , up from 25% in 2000.

These economies have also become a major source of global capital flows, remittances and development assistance to other peer economies, accounting for 40% of global remittances between 2019 and 2023, up from 30% in the first decade of the century.

“In a world marked by political uncertainty and trade tensions, developing economies will need bold and far-reaching policies to seize untapped opportunities for cross-border cooperation,” said M. Ayhan Kose , World Bank Deputy Chief Economist and Director of the World Bank’s Prospects Group.

The report said that  foreign direct investment (FDI) flows to developing economies are about half of what they were in the early 2000s.

He also stressed that new restrictions on global trade have had an influence , which in 2024 were five times higher than the average for 2010-2019.

Regarding the arrival of Donald Trump to the presidency of the United States, the World Bank maintained an “ambiguous” position, although it admitted that the magnitude of the possible changes in the  country’s trade and fiscal policies  is not clear, stressing that a 10 percentage point increase in  tariffs applied to its trading partners could reduce global growth this year by 0.2 points.

He said that the “good performance” of major powers such as the United States and China will be key to the proper performance of developing economies in the future.

Among the regional forecasts, the organization indicated that in Latin America and the Caribbean, growth is expected to increase to 2.5% in 2025 and 2.6% in 2026, while in East Asia and the Pacific, growth is estimated to slow to 4.6% in 2025 and 4.1% in 2026.

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Mexican President Claudia Sheinbaum is seeking to promote private investment, on the one hand, but on the other, the possible continuation of Andrés Manuel López Obrador’s agenda suggests otherwise, said Guillermo Ortiz , former Secretary of Finance and Public Credit (SHCP) and former Governor of the Bank of Mexico (Banxico) .

At the conference Global and National Economic Environment , he said that the reforms to the Judiciary and the disappearance of autonomous bodies have led to an “erosion” of the institutional framework, the consequences of which are only just beginning to be seen.

At the 2025 Economic Outlook Seminar of the Autonomous Technological Institute of Mexico (ITAM) , Ortiz indicated that it is necessary to make an adjustment in fiscal matters, and noted that social spending represents more than 30% of the spending made by the government, which leads to a downgrade and an increase in country risk.

“We have an unsustainable fiscal situation, in the sense that this year we are making a fiscal squeeze of about two points of the Gross Domestic Product (GDP) by cutting expenses,” he said, before which he reiterated that we must look towards private investment and increase tax collection.

In relation to the United States, he said that the arrival of Donald Trumpcauses more uncertainty in Mexico, since the country will face the negotiations of the Treaty between Mexico, the United States and Canada (T-MEC) , scheduled for 2026, weakened by these reforms.

“Trump version 2.0 is Trump one, but corrected and augmented,” and among his proposals he speaks of territorial expansion, the use of force, as well as annexing Greenland, he recalled.

Organized crime , specifically fentanyl , as well as the issue of migration and security , are among the issues that Trump will put on the table in foreign policy with Mexico, and in the negotiation of the T-MEC, in the event of the imposition of tariffs .

“This presents risks, but also opportunities for Mexico to the extent that we reach cooperation agreements on security, on containing the expansion of the cartels. Effective cooperation with the United States in this area will be beneficial for Mexico,” Ortiz stressed.

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In the next negotiation of the Treaty between Mexico, the United States and Canada (T-MEC) , scheduled for 2026, “we are going to move forward,” said Marcelo Ebrard , head of the Ministry of Economy , who considered that this trade agreement has been “a great business and a great success,” where Mexico has a favorable trend in several areas.

At the Mexico Trade Policy Stance conference , Ebrard indicated that our country is entering a new era in its relationship with its northern neighbor , and recalled that six years ago, when the agreement was being negotiated, it was also with President-elect Donald Trump , and whose starting point was that the then North American Free Trade Agreement (NAFTA) had been the worst agreement on the matter in history, so they faced a complicated scenario.

He said things are different now because there is a consensus in the United States regarding protectionism and China. “It is no longer just the design of a policy of an incoming administration, it is a central political consensus that will direct the destiny of the economy at a global level.”

At the 2025 Economic Outlook Seminar , organized by the Association of Alumni of the Autonomous Technological Institute of Mexico (ITAM) , Ebrard said that since the signing of the T-MEC, Mexico has done well so far, as has the United States.

In this regard, he shared some data that show the positive results of this trade agreement, including that the United States and Canada have more than 15 thousand manufacturing plants in our country , as well as that regional trade is 1.8 billion dollars , which represents an increase of 54% compared to 2019.

He stressed that the USMCA generates approximately 3.1 million dollars (mdd) per minute, making it “the best investment we have made.”

In his presentation, he gave as an example that of the main automotive importing companies in the United States ( General Motors , Stellantis and Ford ), 35% of the content of the vehicles assembled in Mexico is of American origin.

“It has been a great business, which explains why these companies have been able to survive, and we are now going to enter a scenario of greater competition for these companies, where any change you make in their relative costs will be a strategic disadvantage for the United States,” he stressed, and emphasized that Mexico is the leading importer and exporter of the United States.

Mexico is in a situation of economic strength , said Marcelo Ebrard, who pointed out that the unemployment rate in the country is lower than that of its northern neighbor, while foreign investment is historic for our country, reaching 35,737 million dollars , an increase of 9% over 2023.

Based on these figures, “you are entering into a negotiation where you are not in a situation of economic weakness that could put you in a more fragile negotiation,” said the head of the Economy, who highlighted that the increase in industrial and commercial construction is notable, and that Mexico is the 12th economy in the world .

Regarding security and migration, which will be part of the topics to be discussed in the USMCA negotiations, he said that deaths from fentanyl have been decreasing, so the trend is favorable, since Mexico has contributed to this reduction. “If this continues, it means that the security issue in the conversations is on a favorable trend for your counterpart, for your interlocutor,” he said.

Regarding arms control, Mexico will propose a symmetry in the effort to reduce its trafficking , since according to data from Customs and Border Protection (CBP) , from October 1, 2024 to January 1, 2025, Mexico has seized 3,602 firearms.

“The trend, thinking about our interlocutor in terms of security on this issue, is fortunately improving and the main issue that Mexico is raising is to help me control weapons,” he said.

During his participation, Marcelo Ebrard recalled that Foxconn is the main importer from China to Mexico, and is therefore a key partner that “will be a partner of Nvidia due to its installation in Jalisco.” He also said that General Motors is the main importer from the United States to Mexico.

Finally, he questioned the “aggressive” protectionist strategy in relation to Mexico and China, and assured that it is not possible to maintain low inflation and sustained growth with the United States. “If you are simultaneously very protective of Mexico and China, it is not compatible.

Meanwhile, Arturo Fernández , rector of ITAM, said that the economic outlook for 2025 is uncertain, bringing technological advances such as Artificial Intelligence (AI) and the United States-China trade conflict, which could be counterproductive for global supply chains.

The imposition of US tariffs will strengthen the dollar and improve the terms of trade to the detriment of other countries, he said, noting that Donald Trump’s mercantilism reflects his concern about trade deficits.

Mexico’s situation is delicate given the threats of the next US president , and he pointed out that the USMCA should be maintained for the benefit of both nations, so our country must be successful in the following negotiations. In addition, he suggested that talks be initiated to sign economic treaties with other countries, such as Korea, and said that distancing itself from the Chinese economy would have some repercussions for Mexico.

To address public policy problems, a broad debate is needed, he said, and indicated that tax collection, mainly of the Value Added Tax (VAT), must be improved.

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The International Monetary Fund (IMF) published its new outlook for global economic growth on Tuesday , where it presented a drop for Mexico to 2.2% in 2024, compared to 2.4% in its previous estimate in April.

The multilateral organization’s report cited that this variation is due to a moderation in demand as the main factor. Furthermore, it reflects a challenging economic environment , where internal and external conditions are influencing growth dynamics.

As for 2025 , the IMF projection for Mexico rose from 1.4% in April to 1.6% in July.

With respect to Latin America and the Caribbean , growth has been revised downwards for 2024 due to climatic factors in some countries such as Brazil, with a growth projection in the region of 1.9%, one tenth below April estimates , and growth of 2.7% is expected by 2025.

At a global level, the IMF report projected growth of 3.2% for this year and adjusted upwards its estimate for 2025, placing it at 3.3 percent. He also noted that global activity and international trade have strengthened at the beginning of the year, with exports from Asia, especially in the technology sector, driving global trade.

However, there are several dynamics that complicate the global economic outlook:

• Persistent inflation: Service price inflation continues to weigh on disinflation, complicating the normalization of monetary policy and increasing the risk of higher inflation. This leads to a picture of higher interest rates for longer.
• Trade tensions: Rising trade tensions and political uncertainty are raising economic risks, affecting both advanced and emerging economies.
• Variations in regional growth: While some economies such as China and India show signs of robust growth, others such as the United States and Japan face significant challenges.

In the United States , the sharper-than-expected slowdown is due to a moderation in consumption and a negative contribution from net trade. While, in Japan , temporary disruptions in supplies have affected growth.

• Commodity prices: IMF projections also indicate a 5% increase in non-fuel commodity prices by 2024, while energy commodity prices are expected to decline by about 4.6%, less than projected previously in April.

Overall, risks to the outlook are balanced. However, some near-term risks have gained importance, particularly in the supply chain .

Rising trade and geopolitical tensions may exacerbate these risks, increasing the cost of imported goods and negatively affecting the global supply chain.

Likewise, persistent inflation in the services sector  presents a significant challenge. The high proportion of labor in costs in this sector, together with limited productivity, makes price moderation difficult.

In that sense, although the global economic growth forecast remains stable, internal economic conditions and variations in monetary and fiscal policies at a global level are significantly influencing the growth prospects of each country.

For Mexico, the downward adjustments in the projections reflect these challenges, while a gradual recovery is expected in the next year.

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