BBVA and Barclays increased their growth forecasts for Mexico’s Gross Domestic Product (GDP) this year from 1.5% to 1.7%, and from 1.2% to 1.8%, respectively, in new outlooks published by the two financial institutions on Tuesday.
The new projections are far higher than the 0.8% GDP growth that BBVA expected for 2025.
Analysts at the two banks credited the Sheinbaum administration’s encouragement of greater private sector participation for the improved projections.
BBVA Mexico’s chief economist, Carlos Serrano Herrera, praised President Sheinbaum for driving mixed-ownership investments in both energy and infrastructure.
“A major bottleneck in the previous administration was the electricity sector,” said Carlos Serrano. “To overcome this, investment is needed, and it will have to be primarily private.”
The OECD and the Bank of Mexico have also raised their 2026 economic growth forecasts to 1.4% and 1.6%, respectively.
Barclays’ chief economist for Mexico and Latin America, Gabriel Casillas, said the upgraded forecasts reflect the anticipated strengthening of the U.S. economy, the acceleration of the global manufacturing cycle and the reactivation of investment.
Casillas also cited the early March 16 start of the United States-Mexico-Canada free trade agreement (USMCA) negotiations as a positive move.
“Because the earlier it starts, the sooner it can end,” said Casillas. “The problem is that the noise that can accompany the negotiations will also arrive sooner.”
However, the exchange rate could remain volatile between now and the end of the negotiations, which are expected to conclude in November, before the U.S. midterm elections, according to Casillas.
The United States has three priorities regarding Mexico in the review: the fentanyl trade, stopping illegal immigration and preventing China from circumventing tariff barriers, according to Casillas.
While the analysts do not expect Mexico to escape tariffs completely, they believe tariffs will remain low.
“We’re going to be left with a tariff of between 5% and 8%,” said Casillas. “President Trump will be able to boast before the November midterm elections that he’s a dealmaker.”
BBVA’s improved forecast is based on the anticipated recovery of investment, resilient consumption and the economic impact of the FIFA 2026 World Cup, of which Mexico is a host country, said Carlos Serrano.
The World Cup could increase Mexico’s GDP minimally, by up to 0.1%, according to estimates.
“Unlike other governments that have hosted World Cups and spent lavishly, increasing their deficits… we won’t see that in Mexico,” Casillas stated.
Pressure from rising oil prices, driven by conflict in the Middle East, could negatively affect short-term economic growth. However, the Mexican government can mitigate the impact through its Special Tax on Production and Services (IEPS) on fuels.
“The government will continue to sacrifice IEPS revenue; the important thing is how long it can do so without putting pressure on the fiscal sector,” said Casillas.
With reports from Heraldo de Mexico, La Jornada and Reporte Indigo
