While Latin America is poised to experience moderate economic gains in 2025, both the World Bank and the United Nations project that Mexico’s growth will lag behind that of its regional neighbors.
The World Bank is projecting 2.6% growth for the Latin America and the Caribbean region (the lowest growth rate among all global regions, it says), while the U.N. commission known as Cepal predicts a growth rate of 2.4% for the region.
However, the World Bank sees Mexico growing by 1.5% in 2025, and Cepal — the Economic Commission for Latin America and the Caribbean — pegs Mexico’s growth rate at a mere 1.2%. In both instances, Mexico’s projected growth rate is the third-lowest among all regional nations, surpassing only Haiti and Cuba.
Additionally, a survey released last month by Mexico’s own central bank (Banxico) revealed that local analysts are more in line with Cepal’s prediction, lowering the country’s growth forecast for 2025 from 1.20% to 1.12%.
In an October report in which it lowered its 2024–2026 economic growth forecasts for Mexico, the World Bank cited uncertainty for investors among the reasons for its more pessimistic outlook.
One reason for its pessimism, a Bank official said, is that Mexico is not fully taking advantage of the nearshoring trend.
Mark Thomas, World Bank country director for Mexico, Colombia and Venezuela, said that multinational companies that have relocated to Mexico amid the nearshoring trend only generate around 0.2% of Mexico’s gross domestic product
Thomas cited water availability, energy supply and the cost of land as concerns, adding that insecurity, government policies and constitutional reforms — especially a controversial judicial reform — are also major issues.
The Banxico survey suggests analysts aren’t confident these issues will be addressed in a timely manner: 77% of those surveyed expect Mexico’s business climate to “get worse,” and 59% of respondents said it was a “bad time” to invest in Mexico.
As for Cepal, its year-end report to the United Nations says Latin America and the Caribbean face a complex panorama in the coming years.
“[T]he region’s economies will stay mired in a trap of low capacity for growth, with growth rates that will remain low and a growth dynamic that depends more on private consumption, and less on investment.”
José Manuel Salazar-Xirinachs, Cepal’s executive secretary, said that Mexico is particularly vulnerable because of Donald Trump’s threats to impose tariffs on Mexican imports to the U.S. once he is sworn in as U.S. president on Jan. 20.
Mexico sends 84% of its exports to the United States, and there is a high level of supply chain integration between the two neighbors.
“If Trump were to implement just a 10% tariff … exports and investments would be impacted, and we’d see Mexico’s GDP reduced by 0.8% to 1%,” he said.
With reports from El Economista and the World Bank
