BBVA Research

GDP fell 0.3% QoQ in 3Q25, reflecting the persistent weakening of domestic demand, with less dynamism in private consumption, a slowdown in the real wage bill and sharp declines in gross fixed investment —affected by legal uncertainty, external volatility and the fiscal consolidation.

Growth and inflation have slowed under tighter monetary conditions, a weaker fiscal impulse, and a challenging global backdrop, supporting expectations of an imminent easing cycle. GDP is set to grow 2.2% in 2025 and 1.7% in 2026, with inflation likely ending this year at 4.4% and next year at 3.8%.

Between 2025 and 2027, GDP will be driven by domestic demand: resilient household consumption, supportive public spending and investment boosted by a healthier construction sector. Persistently high inflation, cautious monetary policy and a wide fiscal deficit weigh on the outlook.

GDP growth will reach 2.9% in 2025 (0.1 pp less than forecast in October), while in 2026 and 2027 the expansion is expected to continue with increases of 2.4% (0.1 pp more than in October) and 2.0%, respectively. The outlook is positive, although significant structural challenges persist.

In this edition of the QLMO, we examine labour market developments using the information available up to Q3 2025. We review the main aggregate indicators and analyse the challenge of generational replacement.

The global economy remains unstable but is faring better than expected. In Türkiye, we maintain our baseline with somewhat a restrictive policy mix in the short term; yet with a balance of risks evolving to a stickier inflation trend due to the prolonged process with more muted gains on expectations.

Argentina holds world-class mining potential. The development of lithium and copper, combined with the Large Investment Incentive Regime (RIGI), could increase production and multiply exports by five by 2032, consolidating the country's role in the global energy transition.

Financing in Mexico has been characterized by three main trends: i) the increase in resources allocated to companies; ii) the fade out of the accounting effect of the exchange rate on the balances of loan and deposit portfolios; and iii) the strengthening of retirement funds as the main source of domestic savings.

Private consumption is set to grow by 3.3% in 2025, two-tenths higher than in 2024, and by 2.5% in 2026, driven by expected increases in household disposable income and wealth. Durable goods and services will continue to lead the expansion in spending.