After ups and downs in 2025, growth and investment remain pending

Mexico avoided the adverse 2025 predicted by the market consensus – in the face of the approaching trade war – thanks to the strong external boost in manufacturing exports. However, a truly expansionary cycle is still far away, economic analysts maintained.

The figures, they explained, show a country that is advancing, but without sufficient momentum to sustainably improve productivity and investment.

“This year “was an up and down. We start in a worrying way with the tariff issue in the United States. April arrived, with reciprocal actions. The global outlook was becoming difficult and a fiscal adjustment in public investment was coming that predicted a complicated situation,” explained Gabriel Lozano, chief economist for Mexico and Central America at JP Morgan.

The Mexican economy rebounded in the second quarter, due to the rebound in the agricultural sector and the good expectations of the industry due to the advance of exports in anticipation of tariffs, he added.

In this context, the Mexican peso did not depreciate this year, which limited competitiveness. In fact, it was a double blow: on the one hand; Effective rates increased around 4.5 percent and at the same time the currency appreciated 13.8 percent in 2025.

Even so, Lozano explained, exports showed an interesting dynamic that has to do with data centers and the technological part that drives trade.

Marco Oviedo, economist and senior strategist for Latin America at XP Investments, commented that the Mexican economy was like “the phoenix”, after growing one percent monthly in October 2025, which surprised analysts.

“The October boost was undoubtedly external because in that month manufacturing exports had their highest monthly growth. It is clearly not sustainable, but it already saved the quarter. Growth in 2025 will be close to 0.4 percent annually,” Oviedo explained.

Structural weakness

The Mexican economy could close 2025 with growth of only 0.5 percent, slightly above the Bank of Mexico estimate (0.3 percent). An improvement is expected for 2026, “but there is still a long way to go for potential growth of 2 percent,” predicted José Carlos Sánchez, chief economist at HSBC Mexico.

The National Institute of Statistics and Geography (Inegi) published a few days ago that the informal sector of the economy employs 28.1 percent of the employed population and contributed only 14.5 percent of the GDP.

Meanwhile, other forms of informality (workers without social security) concentrated 54.4 percent of the employed population and produced only 25.4 percent of the GDP in 2024. In contrast, the formal sector employs 45.6 percent of the total number of workers and generated 74.6 percent of the GDP.

On the other hand, with accumulated figures from January to September (originals), gross fixed investment, which represents the value of durable goods acquired by production units to use in their processes, exhibits structural weakness and this year it contracted 7.6 percent annually compared to the same period in 2024.

Likewise, private investment fell 5.2 percent and public investment 20.2 percent, highlighted Janneth Quiroz, general director of economic analysis at Monex.