The Mexican economy contracted 0.6% in annual terms in September, according to preliminary data from the national statistics agency INEGI.
Reported by INEGI on Tuesday morning in its “Timely Indicator of Economic Activity” report, the contraction in September follows a preliminary data reading of a 0.6% year-over-year decline in August. Final data for August will be published this Wednesday.
Economically speaking, it was a poor third quarter for Mexico as GDP also declined in annual terms in July, falling 1.2%, according to final data.
If confirmed by final data, an annual economic contraction in the third quarter of 2025 — as appears inevitable — would be the Mexican economy’s first year-over-year decline for any quarter since Q1 of 2021, according to Banco Base’s director of economic analysis, Gabriela Siller.
In a social media post on Tuesday, Siller said that INEGI’s data indicates that the Mexican economy grew 0.5% in the first nine months of 2025 compared to the same period of last year.
Weak activity in secondary sector
INEGI’s preliminary data shows that secondary sector activity declined 3% in annual seasonally adjusted terms in September. INEGI estimates that the sector’s output declined 2.7% annually in August, while a 2.8% contraction was reported for July.
New economic data casts a shadow on Mexico’s recent rosy growth forecasts
Mexico’s manufacturing production volume has recently declined, even as export revenue continues to grow.
In better news, INEGI’s preliminary data shows that the tertiary sector grew 0.8% annually in September and 0.4% in August, after expanding 0.4% in July.
INEGI didn’t publish preliminary data relating to the primary sector in September and August. That sector, which includes agricultural, forestry and fishing activities, contracted 12.2% annually in July.
Economy almost stagnant on a month-over-month basis
INEGI also published preliminary data on Tuesday that showed that the Mexican economy grew just 0.1% in September compared to the previous month. INEGI estimates that sequential growth was 0.1% in August as well.
In July, the economy contracted 0.9% compared to June.
The outlook for the Mexican economy
Mexico’s Finance Ministry is forecasting growth of between 0.5% and 1.5% this year, while the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) are predicting expansions within that range.
In late September, the IMF revised upward its 2025 growth forecast for Mexico to 1% from a prediction in April of a 0.3% contraction. The OECD also recently raised its 2025 growth forecast for Mexico and is now predicting a 0.8% expansion.
The median estimate of 33 economists polled by Reuters this month is that Mexico’s economy will record annual growth of 0.5% this year and 1.3% in 2026.
Reuters reported that “key drivers” of the forecasts for the Mexican economy in 2026 are “hopes for a successful renegotiation of the U.S.-Canada-Mexico (USMCA) trade deal and an expected short-term boost from the soccer World Cup to be hosted in the three countries” next year.
“Still, already implemented U.S. levies and the threat of more tariffs globally will continue limiting Mexico’s economy while trade negotiations drag on, particularly in most affected sectors like the automotive industry,” the news agency wrote.
With reports from Aristegui Noticias, La Jornada, El Economista and Reuters
