Mexico’s GDP grew 0.2% in the first quarter of 2025 compared to the final three months of last year, according to preliminary data from the national statistics agency INEGI.
The modest growth allowed the Mexican economy to avoid a technical recession after it contracted 0.6% on a sequential basis in the final quarter of 2024.
Today’s Q1 GDP data:
+0.4% Eurozone
+0.3% Italy
+0.2% Germany
+0.2% Austria
+0.1% France
+0.2% Mexico
-0.3% U.S.— Jeffrey Kleintop (@JeffreyKleintop) April 30, 2025
The quarter-over-quarter growth was above the 0% expansion forecast by analysts polled by Reuters and the 0.1% growth prediction of analysts surveyed by Bloomberg.
Published on Wednesday, INEGI’s preliminary data also showed that the Mexican economy grew 0.6% annually in the first quarter in seasonally adjusted terms and 0.8% in non-seasonally adjusted terms.
In a note to clients, Pantheon Macroeconomics chief Latin America economist Andres Abadía said that “the quarter-to-quarter gain helped the Mexican economy avoid a technical recession, but it does little to alter the weak trajectory.”
Gabriela Siller, director of economic analysis at Banco Base, posted a graph to X that showed that GDP growth in Mexico has trended down in recent years.
“This is what Mexico’s economic growth looks like. If it’s not a recession, it’s a marked economic slowdown,” she wrote.
The biggest factor currently weighing on Mexico’s growth prospects is United States President Donald Trump’s “America First” protectionist agenda, which includes tariffs on some imports from Mexico despite the existence of the USMCA free trade pact.
In that context, the International Monetary Fund is forecasting that the Mexican economy will contract in 2025, while the World Bank is predicting 0% growth.
President Claudia Sheinbaum has rejected those forecasts, asserting that international financial organizations don’t take into account federal government efforts to stimulate the economy, including through its Plan México initiative.
Mexico’s Finance Ministry is currently forecasting GDP growth in the range of 1.5%-2.3% this year.
INEGI’s latest economic growth data was released the same day that the United States Department of Commerce reported that the U.S. economy contracted 0.3% in the first quarter of 2025 compared to Q4 of 2024.
Primary sector grows 8.1%, its best result since 2011
The primary sector of the Mexican economy, which includes agriculture, fishing and mining, grew 8.1% in the first quarter of the year compared to the previous three months, according to INEGI’s preliminary data. That was the best quarter-over-quarter result for the sector since 2011.
The primary sector was the only sector to grow on a quarter-over-quarter basis.
The secondary (manufacturing) sector contracted 0.3% compared to the final quarter of 2024, while the tertiary (services) sector was unchanged with 0% growth.
Siller wrote on X that “primary [sector] activities saved the quarter and only due to a rebound” from a weak result in the last three months of 2024.
“Secondary activities fell for a second consecutive quarter, something that hadn’t happened since 2020,” she added.
In another post, Siller said that the primary sector is “very volatile” and therefore its strong first-quarter growth should be “taken with caution.”
She asserted that the risk of recession in Mexico in 2025 remains “high.”
In annual terms, the primary sector grew 6% in the first quarter of the year, while the tertiary sector expanded 1.3%, according to the preliminary data.
The secondary sector contracted 1.4% compared to Q1 of 2024.
Siller highlighted that the secondary sector generates one-third of Mexico’s GDP and its growth prospects are at risk due to the United States’ tariff policies, which include duties on Mexican steel, aluminum, cars and goods not covered by the USMCA.
The value of Mexico’s exports actually increased to an all-time high in the first quarter of 2025, but that was partially due to U.S. importers bringing forward orders to avoid higher tariffs, according to the El Financiero newspaper. Tariffs on Mexican steel, aluminum and goods not covered by the USMCA only took effect in March, while the U.S. began collecting duties on cars in early April.
According to data cited by Siller, the primary sector represents only 3.4% of Mexico’s GDP, while the tertiary sector — which employs almost half of all Mexican workers — generates more than 63% of GDP.
With reports from El Economista, El Financiero and Reuters
