Mexico Economic Outlook. September 2026

We have revised our 2026 growth forecast upward to 1.4% (from 1.2% before); we anticipate that the gradual recovery of domestic demand will sustain the pace of expansion. Following a weak 2025, formal employment is beginning to improve. We expect core inflation to resume its downward trend in the second quarter of the year.

Key points

• Key points:
• Consumption will remain supported by real wage gains, while investment benefits from construction and favorable signs in machinery and equipment. Added to this is the higher US demand for AI-linked manufacturing.
• Formal employment maintains limited growth in an environment of higher informality and lower business dynamism; we estimate an increase of 1.4% in 2026 and 2.0% in 2027.
• We forecast that headline inflation will close 2026 at 3.7% (-0.4 pp vs. previous forecast) and core inflation at 3.8%. Looking ahead to 2027, we maintain our forecast that both will converge to 3.5%.
• Mexico is better prepared to sustain a narrower interest rate differential, while Banxico's pause prioritizes domestic conditions over the Fed's new cycle.
• Should the global situation normalize, we expect the exchange rate to very likely settle around 17.30 and 17.70 pesos per dollar by the end of 2026 and 2027, respectively.

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