Mexican Economic Forecasts Slashed Amid U.S. Trade Uncertainty
The Bank of Mexico has reduced growth forecasts for the nation's economy due to sluggish activity and U.S. trade policy uncertainties. While avoiding recession, stagnant growth and inflationary concerns are notable. Despite resilient exports, lower demand from the U.S. is expected, influencing investment and economic conditions.
The Bank of Mexico has lowered its economic growth forecasts for this year and next, citing sluggish domestic activity and uncertainties arising from U.S. trade policies. According to its latest quarterly report, the Mexican economy is experiencing significant weaknesses and faces various challenges.
Banxico, as the central bank is known, predicted a mere 0.1% growth in Mexico's GDP this year, down from a prior estimate of 0.6% made in February. Additionally, the 2026 GDP forecast was halved to 0.9%, compared to 1.8% anticipated earlier this year.
Domestic activity is projected to remain sluggish, exacerbated by challenges related to changes in U.S. trade policy, though some governors asserted that a recession is not imminent. Exports have remained resilient, but the impact of U.S tariffs could lead to reduced external demand. Consequently, the bank lowered its interest rate and highlighted ongoing inflationary concerns.
(With inputs from agencies.)
Google News