The World Bank updated its 2025 economic growth forecast for Mexico on Tuesday, amid growing trade uncertainty that is expected to hit Mexico harder than other Latin American countries. 

The World Bank anticipates a GDP growth rate for Mexico of just 0.2% in 2025. That’s slightly up from its April reading of 0%, but down from the 1.5% growth it had predicted for this year in January. The growth forecast for 2026 is 1.1%. 

Meanwhile, the growth rate for Latin America as a whole was revised downward from 2.6% to 2.3% in 2025 and to 2.4% in 2026. 

“Only six months ago, a ‘soft landing’ appeared to be in sight,” World Bank Senior Vice President and Chief Economist Indermit Gill wrote in the report’s foreword. “That moment has passed. The world economy today is once more running into turbulence.”

Gill explained, “International discord—about trade, in particular—has upended many of the policy certainties that helped shrink extreme poverty and expand prosperity after the end of World War II.” 

Increasing trade barriers and greater uncertainty globally are expected to slow economic growth across Latin America, according to the World Bank’s June Global Economic Prospects. 

Mexico, the region’s second-largest economy, will be the most directly affected, largely due to the 25% tariffs imposed on imports by the United States for goods that are not compliant with the United States-Mexico-Canada free trade agreement (USMCA). Mexican exports to the U.S. in 2024 accounted for 80% of the country’s total exports, and around half of them were not covered by the UMSCA.

In comparison, U.S. tariffs on imports from other Latin American countries are at 10%.

“Additional trade restrictions under a revised United States-Mexico-Canada Agreement could further reduce Mexico’s exports,” the World Bank warns. Meanwhile, “a sharper-than-expected slowdown in U.S. growth would significantly reduce demand for LAC (Latin America and the Caribbean) countries’ goods and services.” 

Latin America must focus on keeping “headline inflation relatively contained despite volatile food inflation,” according to the World Bank. 

The global economic growth forecast is also lower than last year, at 2.3% in 2025 compared to 2.8% in 2024.

Meanwhile, China’s economic growth is projected to decrease from 5% in 2024 to 4.5% this year and 4% next year. The strict tariffs on imports from China to the U.S. will likely also hamper Chinese nearshoring activities in Mexico.  

With reports from Minenio and Los Angeles Times