Citing “uncertainties,” the International Monetary Fund (IMF) has lowered its growth forecast for Mexico, prompting Finance Minister Edgar Amador to respond by expressing confidence that the economy will outperform IMF projections.

In a World Economic Outlook update, the U.N.-linked financial institution lowered Mexico’s growth outlook for this year to 1.2% from the 1.6% it predicted in its April report.

It also reduced the 2027 growth forecast for Mexico, Latin America’s second-largest economy, to 1.9%, down from the 2.2% estimated three months ago.

The IMF wrote that uncertainties continue to hold back economic activity in Mexico, but  Amador pointed out that the revision presented by the IMF was not ‌due ⁠to domestic factors.

“It was a global downward revision to the IMF’s estimates for world economies resulting from the shock to the ⁠energy market caused by tensions in the Persian Gulf,” he said.

The report was made public the same day U.S. President Donald Trump told reporters he was ending the cease-fire agreement with Iran following renewed hostilities between Iran and the United States.

The IMF said “[r]isks to the [global] outlook are more balanced than in April but still tilted to the downside. The possibility of renewed Middle East conflict looms large and could extend commodity price volatility, further threaten supply chains, raise prices and weigh on financial conditions.”

Amador, who a day earlier had pointed to another UN-connected agency’s report that Mexico is among the top 10 globally in attracting Foreign Direct Investment, also noted that ⁠the IMF’s initial estimates for Mexico’s economy for 2025 turned out to be overly pessimistic and ⁠the results — the economy grew 0.5% in 2025 — were closer to the government’s projections.

Once again, IMF forecasts are more circumspect than those of the Mexican government, which has estimated growth of 1.8% to 2.8% for this year and projects growth of between 1.9% and 2.9% for 2027.

While forecasting stable growth in Latin America and the Caribbean with moderate acceleration next year, the IMF said economic growth in Mexico “is projected to accelerate modestly amid less restrictive domestic policies, but uncertainty will continue to constrain activity.”

The update places Mexico below the estimated growth for Latin America, which is expected to increase by 2.4% in 2026 and 2.7% in 2027.

It also sees global growth rising above baseline if tangible progress is made in international negotiations and domestic policy agendas, while adding that current challenges demand nimble and credible policies.

One comment in the report that is particularly relevant for Mexico refers to trade pacts, which the IMF insists “could lower tariffs and revive investment that has been delayed by an uncertain external environment.”

Mexico has just this month begun to deal with the consequences of the U.S. decision to not renew the U.S.-Mexico-Canada trade agreement in its current form. The necessity of negotiating annual reviews of the pact puts key industries — such as the automotive sector, Mexico’s leading economic driver, generating over US $100 billion in annual exports — and new investment in limbo.

With reports from LópezDóriga.com, Reuters and BNamericas