The International Monetary Fund (IMF) revised its projections for Mexico’s economic growth on Friday to 1.5% in 2026 and 1.8% in 2027, following a strong second-quarter economic performance, just three months after the organization had lowered this year’s growth forecast to 1.2%. 

Achieving the forecasted economic growth will depend on Mexico making a greater effort to reduce its debt through fiscal consolidation, according to the IMF, which warned that growth will likely remain constrained by external uncertainties. 

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The recent revision follows an official visit for an Article IV consultation mission to Mexico City in September, led by Gustavo Adler, IMF Deputy Division Chief in the Western Hemisphere Department. 

Mexico recorded the second-highest quarter-over-quarter economic growth among G20 countries in the second quarter of the year, at 1.4% on a quarter-over-quarter basis between April and June, recovering from a 0.6% sequential contraction in the first quarter.

Better-than-expected figures continued to come into frame in July, with Mexico’s economy growing by 3.3% in seasonally adjusted annual terms, marking the strongest growth of any month so far in 2026.

In its October assessment, the IMF highlighted that Mexico’s disinflation process has continued and headline inflation is near target, although some underlying price pressures persist. 

Mexico should focus on much-needed growth-enhancing investment by mobilizing revenues, better prioritizing spending and allowing greater private-sector involvement, according to the organization. 

Meanwhile, the government should fortify its disinflation efforts by maintaining a moderately tight stance until there is clear evidence that inflation is moving durably toward the target, the IMF advised. 

Achieving greater financial growth will require Mexico to close infrastructure gaps, reduce regulatory burdens and strengthen trade integration, the IMF said. Improving security, combating corruption and lowering informality could also spur growth.

Mexico’s 2027 draft budget focuses more closely on gradual fiscal consolidation than previously announced, and on an upward debt trajectory, the IMF reported. 

Nevertheless, the 2027 draft budget anticipates that public debt will increase to 55% of GDP from an estimated 54% at the end of 2026, even as it doubles down on its fiscal consolidation efforts. 

With reports from Reuters