The Mexican economy could resist the “blows” generated by President-elect Donald Trump’s strategies against Mexico, said Pamela Díaz Loubet, chief economist at BNP Paribas Mexico.
The economist pointed out that there are three channels that could be affected by the Republican’s policies: remittances, industrial cycles and exchange rates. However, he noted that there are reasons why they could show resilience.
In the first case, he explained that the Republican’s deportation policies could affect the flow of remittances to the country, currently 43,027 million dollars as of September.
“An immigration policy that reduces the number of migrants in the US would affect the Mexican economy,” he said.
However, he commented that the Trump administration could reach an agreement with Claudia Sheinbaum’s, like the one made during the Republican’s first government (2016-2020), which would mitigate mass deportations.
He added that border patrol also has limitations, so deportations may not be high enough to affect the flow of remittances.
“The flow of migrants to the US has increased but it has also diversified, the sectors that have had an increase in migrants are greater and at the end of the day it causes the sending of remittances to be more contained,” he noted.
Although this income is not generated by the government or by the Mexican industry, it is a trigger for internal consumption, one of the engines of the Gross Domestic Product (GDP). Remittances represent 3.7% of annual GDP.
Regarding the industry, Pamela Díaz said that she is with nearshoring and with the review of the USMCA in 2026, which could be threatened by Trump’s restrictive trade policies.
The economist commented that the Republican’s statements could remain promises because there are two acts in the United States Congress that support both the relocation of companies in Mexico and North America and the trade agreement.
“They have already passed in Congress, there are already funds allocated, it is unlikely that Trump will be able to reverse them,” he said.
In addition, he said that a “new trade war” between China and the United States would end up benefiting Mexico, just as happened a few years ago when the Trump administration confronted the Asian giant’s trade.
The USMCA will face a review in 2026 by North American executive administrations.
For the economist, the exchange rate is one of the channels where the effect of the United States election is most evident.
He commented that the resilience factors that could support the peso are the sources of financing for the national economy, and added that according to data from Banco de México, internal financing exceeded external financing.
“The composition of the sources indicates that 76% is internal and 24% is external. So it is one of the elements that could generate resilience,” he said.
On the other hand, he mentioned that imported goods as a proportion of consumption are around 10%, which could also contain the depreciation of the peso. The exchange rate is currently at a level of 20.44 pesos per dollar.
He pointed out that the GDP could grow 1.2% in 2025, already contemplating the ravages and policies of the Republican president.
Forecasts inflation of 3.7% in 2025
The havoc that Trump’s trade policies would generate would not stop at Mexican exports, but rather the price of products could rise, both in Mexican territory and in the United States, considered Pamela Díaz Loubet.
“With Donald Trump in the presidency it is clear that the impact on inflation is much clearer, also for the United States,” he said.
He explained that it is because Trump’s protectionist policies, such as tariffs on Mexican products, would raise prices and impact consumers’ pockets.
If Mexico responds with tariffs, products of American origin could increase their cost to the final consumer.
“We estimate an inflation rate of around 3.7% annually at the end of 2025, with an upward trend,” he commented.
According to information from Banco de México Banxico, inflation for 2025 would close at 3.8%. The central bank’s inflation target is 3% plus/minus one percentage point.
The economist commented that “it is very likely” that the Federal Reserve (Fed) will slow down its cycle of interest rate cuts, currently in a range of 4.50 and 4.75%, and if the forecast comes true, it could generate “a shock” that interrupt the disinflationary process in the United States.
“The exchange rate shock could also impact inflation in Mexico,” he recalled.
Inflation in Mexico and the world began an upward trend in 2021, during the Covid-19 pandemic, due to an interruption in supply chains, which limited the production and supply of thousands of products and services from different industries. .
According to Inegi, inflation rebounded in October to an annual rate of 4.76%, from a previous level of 4.58%.
In the United States, inflation fell to an annual rate of 2.4% in September, from 2.5% previously. The October rate will be published in the coming days.
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