Monday, March 31, 2025

Banxico survey lowers GDP growth forecast to 1.12% in 2025

Experts polled by the Bank of Mexico (Banxico) on Monday revised their GDP growth estimate for 2024 from 1.53% to 1.60%, while lowering the growth forecast for 2025 from 1.20% to 1.12%. 

The estimates are based on results from a survey of 41 private sector specialists. While GDP growth is expected to fall in 2025, they predict it will increase to 1.8% in 2026. 

The slowdown in manufacturing activity came as Mexico seeks to bolster the sector by attracting foreign investment amid the nearshoring trend.
The lower growth outlook for 2025 results from several concerns including political uncertainty — both within Mexico and abroad. (Juan José Estrada Serafín/Cuartoscuro)

The exchange rate

The survey provided several other financial outlooks. The analysts expect to close 2024 with an exchange rate of 20.25 pesos to the United States dollar. They reduced the rate outlook for 2025, from 20.59 to 20.53 pesos, and in 2026, from 21.23 to 21.00 pesos. 

Inflation forecast

The analysts see inflation falling slightly by the end of 2024, from 4.42% to 4.37% for annual headline inflation and 3.69% to 3.6% for underlying inflation. This excludes the prices of volatile goods and services, including agricultural products, energy and government tariffs. 

In 2025, the group anticipates headline inflation will average 3.8% and underlying inflation 3.72%, and in 2026, 3.7% and 3.6%, respectively. While some improvement is expected, projected inflation remains higher than the Banxico target of 3%.

Will the business climate improve or deteriorate?

When asked about the business climate in the next six months, 77% of those surveyed expected it to “get worse,” a slight improvement on the previous response rate of 79%. Meanwhile, 13% predicted it would “stay the same” and 10% said it would “improve.”  

A slight majority — 59% of respondents — said it was a “bad time” to invest in Mexico, compared to 68% in the previous survey; 33% said they were “not sure” and 8% believed it was a “good time.” 

Economy Minister Marcelo Ebrard referred to several investment announcements for 2025 in his speech that are neither new nor completely certain.
Economy Minister Marcelo Ebrard said recently that FDI in Mexico had reached 35.7 billion dollars through Q3 of 2024. (Andrea Murcia/Cuartoscuro)

FDI outlook

The anticipated foreign direct investment (FDI) for 2024 was revised downwards from previous estimates, from US $37.13 billion to $36.51 billion, which would still be slightly above last year’s sum of $36.06 billion.  

The analysts highlighted several factors impeding Mexico’s economic growth over the next six months: 48% thought governance would hinder growth, 21% mentioned internal economic conditions and 18% said external conditions. 

They also emphasized public insecurity (17%), internal political uncertainty (15%), problems related to the lack of rule of law (11%) and the internal economic situation (9%).

Earlier forecast reductions

In October, the International Monetary Fund (IMF) lowered its 2024 economic growth forecast for Mexico to 1.5% while projecting even slower growth in 2025, citing capacity limitations and a restrictive monetary policy. 

The World Bank also reduced its economic growth forecasts for Mexico for this year and the next two, citing uncertainty for investors among the reasons for its more pessimistic outlook. 

With reports from El Financiero, Alto Nivel and Forbes

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