BBVA Research

Since July, a combination of interest rate volatility and the electoral outcome in the Province of Buenos Aires has generated renewed tensions in financial markets. Higher rates, exchange rate pressures and weaker confidence have led to a slowdown in economic activity.

Mexico's economy slowed by mid-2025. Growth in Q2 2025 was concentrated in primary activities (+4.5%) and services (+1.1%), while industry contracted (−1.3%). Services, particularly tourism and trade, drove stronger performances in CDMX and Baja California. The automotive sector saw declining exports due to new tariffs.

The Brazilian economy has been losing momentum, reinforcing deceleration prospects. GDP is expected to slow to 2.2% in 2025 and 1.5% in 2026, helping inflation ease to 4.8% by end-2025 and 3.7% by end-2026, paving the way for a monetary easing cycle from early 2026.

The Peruvian economy keeps performing solidly, supported by the strength of domestic demand. High terms of trade, the onset of new mining projects, and the recently approved pension funds withdrawal are expected to drive output growth to 3,1 % in both 2025 and 2026, despite the electoral uncertainty.

The Colombian economy will grow by 2.5% in 2025 and 2.7% in 2026, driven by domestic demand while investment begins a gradual recovery. Sticky inflation and fiscal challenges will condition the pace of interest rate cuts by the Central Bank.

Domestic demand continues to slow; private consumption fell (-)0.1% as of June (YoY, cum.), while investment contracted (-)6.4%. We revise our 2025 growth forecast upward to 0.7%, supported by the favorable performance of the economy in 1H25, although expectations point to a slowdown in the second half of the year.

The increase in total tourist spending with cards by Spaniards and foreigners slowed during the second four-month period of 2025, standing at 5.7% y/y (4.5 pp less than in the previous period), in a context of rising prices.

In August, Social Security lost 199,300 contributors and unemployment rose by 21,900 due to seasonal factors. Once seasonally adjusted (SA), the number of contributors increased by 29,900 and the number of unemployed fell by 4,800. The share of temporary contracts in the General Regime stood at 13.7% (SA).

The United States faces global uncertainty in terms of trade policy, with forecasts of inflation and interest rate cuts. At the same time, the Colombian economy is recovering, with consumption driving the recovery. Unemployment rates are low and informality is on the rise.