Mexico Economic Outlook. December 2025

Summary

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.

Key points

• Key points:
• Downward bias for 2025 growth (0.7%), although a moderate rebound is anticipated in 2026 (1.2% vs. 1.0% previously) due to improved consumption, employment and less uncertainty for investment.
• Formal job creation is stagnant and at its lowest level since 2010 (excluding 2020). The uptick resulting from the incorporation of digital-platform workers was temporary. Formal employment is expected to grow by 0.9% in 2025 and 1.9% in 2026.
• We expect headline and core inflation to be within the variability range by the end of 2026, at 3.8%, up 0.3 pp from our previous forecast.
• We anticipate that Banxico could pause in 1Q26 before implementing two additional cuts that would bring the rate to 6.50%.
• Public debt will remain stable around 51.4% of GDP in 2025.

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