Mexico | Economic activity contracts in 1Q26; outlook tilted to the downside

Summary

GDP contracted 0.8% QoQ in 1Q26, with declines in both industry (-1.1%) and the tertiary sector (-0.6%), marking a weak starting point for 2026.

Key points

• Key points:
• The weakness in the first quarter reflects softer momentum in manufacturing and services, amid a backdrop of elevated uncertainty and persistent pressures on energy prices.
• Demand-side data point to a deterioration at the start of the year, with declines in investment and consumption, in a context of external slowdown and increased corporate caution (wait-and-see).
• Private spending shows broad-based moderation: stagnation in domestic goods, modest growth in services, and a slowdown in imported goods following previously elevated levels.
• We expect the boost from the World Cup in 2Q26 to be insufficient to offset the contraction observed at the start of the year, introducing a downside bias to our 2026 growth forecast (BBVA: 1.8%).

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