Wednesday, September 17, 2025

Moody’s predicts Mexico will be unable to avoid recession next year

The Mexican economy will likely fall into recession next year, according to economic research firm Moody’s Analytics.

Alfredo Coutiño, the company’s head of Latin America research, believes there is a growing probability that the global economy will enter a recession in the next 12 months and that Mexico will be unable to avoid suffering the same fate.

“Given the increasing probability of a global recession within the next 12 months, Mexico would be unable to avoid an economic contraction caused by a recession in the United States,” he said.

In a report, Coutiño set out a global recession scenario in which a contraction begins here in the second quarter of 2023 and lasts for a total of three quarters. In the scenario, he anticipated that GDP will shrink 1.7% in the next calendar year, after growth of 1.8% in 2022. The contraction between the second and fourth quarters of 2023 would be 3.4%.

Coutiño’s report said the Mexican economy faces a combination of unfavorable events, including the persistence of supply shocks in the global economy, high prices for raw materials and weakening of domestic demand amid the necessity to raise interest rates to combat high inflation.

In the anticipated recession, Mexican families would suffer both from a decline in their purchasing power due to high inflation and higher unemployment, according to Coutiño.

His report envisioned Mexico coming out of recession in unison with the United States in the first quarter of 2024 and an ongoing recovery in 2025 as the U.S. economy strengthens. In the scenario, a reduction in unemployment would quicken in 2025,  and inflation would drop to the central bank’s target rate of 3% in the middle of that year.

Although Moody’s Analytics anticipates a recession in the United States, the U.S. government is downplaying that possibility. “We’re not going to be in a recession, in my view,” U.S. President Joe Biden told reporters Monday.

“The unemployment rate is still one of the lowest we’ve had in history. It’s in the 3.6% area. We still find ourselves, the people, investing. My hope is we go from this rapid growth to a steady growth. And so, we’ll see some coming down. But I don’t think we’re going to, God willing, I don’t think we’re going to see a recession,” he said.

If Mexico’s economy does suffer a recession next year, it will be the third time that an annual contraction is recorded during President López Obrador’s six-year term. The COVID-19 pandemic and associated restrictions caused GDP to plummet 8.5% in 2020, while there was a 0.1% contraction in 2019.

With reports from El Financiero, Reforma, El Economista and CNN

Have something to say? Paid Subscribers get all access to make & read comments.
Guiengola, Oaxaca

Biologists work to turn Oaxaca’s Guiengola archaeological zone into nature reserve

0
Led by 23-year-old biologist Eduardo Michi, a group of scientists has deployed camera traps across more than 300 hectares to document local fauna like coatis, rabbits, squirrels and ocelots.
Fonatur glorieta in Los Cabos

MND Local: Major infrastructure projects reflect growing pains in Los Cabos

0
New airport facilities and new highways are on the way in Los Cabos, as our local news roundup takes a look at what's happening in Baja California Sur.
mural honoring Alicia Matías

A mural at explosion site in CDMX honors Alicia Matías, who died saving her granddaughter

1
The 49-year-old heroine's death has been met with an outpouring of admiration while the nation mourns the 15 victims of last week's gas tanker explosion.
BETA Version - Powered by Perplexity