Mexico’s central bank and one of the world’s leading economic bodies both upgraded their growth outlooks for the country this week, offering encouragement for an economy that grew just 0.8% in 2025.

The Bank of Mexico (Banxico) raised its 2026 GDP growth forecast to 1.6% from 1.1% in its quarterly report for October–December 2025, published Thursday. The central bank also revised its projected range upward to between 1% and 2.2%, abandoning its previous range of 0.4% to 1.8%.

Separately, the Organization for Economic Co-operation and Development (OECD) published its Economic Survey of Mexico 2026 on the same day, projecting GDP growth of 1.4% this year and 1.7% in 2027. That compares with the OECD’s December forecast of 1.2% growth for 2026 — meaning the Paris-based organization has also nudged its outlook higher.

Banxico Governor Victoria Rodríguez Ceja, presenting the quarterly report, said that 2025 had seen an intensification of economic weakness that began in 2022, in what she described as a “particularly complex” environment characterized by “elevated uncertainty.” She attributed the improved 2026 forecast largely to better-than-expected GDP performance in the fourth quarter of 2025, which created a higher statistical base for this year’s growth.

Despite the upgrades, both institutions struck a cautious tone. Rodríguez Ceja said risks to the growth outlook remain skewed to the downside. Banxico’s report identified six key downside risks: a worsening of global uncertainty; geopolitical conflicts; slower-than-expected U.S. economic growth; supply chain disruptions from tariffs; financial market volatility; and adverse weather events.

The OECD echoed those concerns, noting that trade tensions and heightened global policy uncertainty remain significant risks, and that private investment will continue to be constrained by domestic and international uncertainty, even as it gradually benefits from lower interest rates.

Banxico’s 2027 forecast remained unchanged at 2%, the midpoint of a range between 1.2% and 2.8% — above both the OECD’s 1.7% projection and a Citi market survey estimate of 1.8%.

Both forecasts remain well below the Mexican government’s 2.3% projection, which underpinned its 2026 budget package.

The upgraded forecasts come as Mexico navigates a delicate moment: trade policy uncertainty from the United States, a pending USMCA review and domestic fiscal consolidation efforts are all shaping the economic outlook. The OECD noted that a swift and successful USMCA renegotiation could provide a meaningful boost to investment and exports beyond what is currently anticipated.

With reports from El Economista