Mexico Economic Outlook. November 2024

Summary

We keep our GDP growth forecast for 2024 unchanged at 1.2%, and 1.0% for 2025; the favorable impact of economic activity in 2H24 is offset by lower exports and investment in the face of new tariffs next year.

Key points

• Key points:
• The slowdown in investment will accentuate in 2025 amid higher uncertainty due to the recently approved judicial reform and changes in US trade policy.
• The slowdown in investment due to deceleration in public construction, including some machinery and equipment segments.
• Formal employment is expected to end with moderate growth in November and a seasonal decline in December, with a 1.8% increase in 2024 (402 thousand jobs), 1.9 pp below the average of the past three years.
• With inflation improving and demand weakening, Banxico still has ample room to lower the monetary rate, which we expect to close 2025 at 8.0%.
• We anticipate the Historical Balance of Public Sector Borrowing Requirements will be 52.7% by the end of 2025 vs. 51.0% of GDP in 2024.

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