The Government of Claudia Sheinbaum reduced its growth forecast for the economy this year to a range between 1.5% and 2.3%, from the previous 2% to 3%.
The downward review responds to a slowdown in residential investment, a lower expansion in oil mining and persistent effect of supply shocks from 2024, Treasury said in its general precritories of economic policy 2026.
The agency added that the uncertainty about the commercial policy of President Trump and the adjustments in the US relationship with his partners have generated a sensitive increase in caution in private investment and consumption, affecting their dynamism in the short term.
The Government also reduced its prognosis of GDP expansion by 2026, passing it from a range of between 2% and 3% to one ranges between 1.5% and 2.5%.
Adjust is still too optimistic
The new official growth estimate for this year is still too optimistic in the face of private sector forecasts.
Just Tuesday Banxico published the results of his most recent monthly survey on economic expectations. The consensus of the 42 analysis groups consulted by the Central Bank reduced from 0.8% to 0.5% its country’s economic growth forecast by 2025, while by 2026 the expectation fell from 1.7% to 1.6%.
In the most recent biweekly survey of CITI, the consensus of the 37 financial groups consulted reduced its prognosis for GDP in 2025 to 0.6%, from the previous 0.8%, and by 2026 the forecast fell marginally from 1.8% to 1.7%.
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The director of Economic Analysis of the Base Financial Group, Gabriela Siller, stressed that despite the decline adjustment, the government forecast for this year is still very high, since the lower part of the range (1.5%) is the triple of what analysts surveyed by Banco de México estimate.
“If this GDP growth estimate is not reached, then the reason for the financial requirements with respect to GDP because it will obviously be higher,” he said in a comment for the press.
The review of the GDP estimated is given after the Mexican economy contracted 0.6% in the last quarter of 2024, according to unstacted data, and the growth was 1.2% for the whole year, the weakest since the coronavirus pandemic.
Analysts anticipate a fall in the Mexican economy in the first quarter of this year due to the uncertainty and impact of possible tariffs by the United States on the second largest economy in Latin America.
The Treasury forecasts contrast with those of agencies such as the Organization for Cooperation and Development and Private Consulting that have even warned that the Mexican economy could face a recession this year as a consequence of the commercial war unleashed by Washington.
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Hacienda explained that despite an “uncertain external environment” for global commercial tensions and geopolitical conflicts, “Mexico has a more diversified economy and a robust domestic market, which improves its response capacity to international clashes.”
He also pointed out that private consumption “will be strengthened by job creation, salary growth and greater access to credit”, while social programs “will continue to raise homes and reinforce their purchasing power.”
They warn possible to qualify
Regarding the fiscal deficit, which analysts are closely followed as an indicator of the health of public finances, the Treasury expects the year between 3.9% to 4%, compared to 3.9% of the GDP initially projected.
“The broad deficit that implies the financial requirements of the public sector is between 3.9 and 4% of GDP, but if the GDP is smaller than it is estimated, that is, the growth of 1.5% is not reached because then that will go above 4% and there could be cuts in the credit rating of the sovereign debt,” Siller warned.
Last year, the fiscal deficit closed in 5.7% of GDP, the highest in almost two decades.
The Government added that the strategy on income will be based on greater collection efficiency and the use of digital technologies. Public spending, meanwhile, will focus on social programs and investment in infrastructure and energy transition.
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It also advanced that public sector financing will prioritize the indebtedness in local currency, at a fixed and long -term rate, which reduces exposure to international financial volatility and by 2026 a “lower pressure on the financial cost of the debt is anticipated, thanks to a global lower rate environment and a lower level of indebtedness in Mexico”.
As for inflation, the Treasury maintained its estimate for closing 2025 at 3.5%. By 2026 he estimated that it is 3% at the end of the cycle.
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The General Consumer Price Index was 3.67% in the first half of March, according to INEGI data.
The macroeconomic expectations offered in precriterities are considered an advance of the budget project for 2026, which the Government will deliver to Congress in September for discussion.
This note was originally published at 6:32 p.m. and subsequently updated
With information from Francisco Rivera, Reuters and Efe
