Forecasted Economic Growth for Mexico in 2025 by OECD: Lowest in Latin America Reduced
Title: Mexico's Economic Forecast: A Steep Decline in 2025
Feeling down about Mexico's future growth? Here's the lowdown:
The Organization for Economic Co-operation and Development (OECD) ain't bullish about Mexico's economic growth prospects for 2025. They've slashed their forecast, predicting a meager 0.4% increase in GDP – the lowest among Latin American countries. That's a sharp drop from the initial projection of 1.2% made back in December 2024.
Why the Long Face, Mexico?
The OECD's latest report points a finger at several factors causing this economic gloom:
- Trade Barriers with the US: The Old Man from the White House decided to throw up some new obstacles for Mexican imports, making it tougher for Mexico to compete in the US market and shaking investment confidence.
- Internal Dynamism: The report paints a picture of a stagnant Mexican economy, with paltry private investment and modest consumer spending. These factors limit the country's ability to recover from the slump.
It's a sobering prognosis, but don't count Mexico out just yet. The OECD predicts a modest rebound in 2026, with an estimated GDP growth of 1.1%. But that recovery depends on reducing commercial uncertainties and implementing policies that boost domestic investment and consumption.
There's a Storm Coming:
The Mexican economy is like a yacht sailing at the mercy of the California coast. It's mostly exposed to external risks, particularly because over 80% of its exports are destined for the good ol' US of A. That means a slowdown in the US economy for 2025–2026 coupled with tighter financial conditions could further dim external demand and investment for Mexico.
What's a country to do in such a situation? Experts recommend diversifying exports and strengthening the domestic market to weather trade tensions and foster more sustainable economic growth.
The OECD's outlook adds to the concerns expressed by other organizations. For example, the Bank of Mexico trimmed its growth estimate for 2025 to a dismal 0.1%, blaming persistent economic sluggishness and global challenges, including changes in US trade policy.
Among these challenges, the tightening of rules under the USMCA (United States-Mexico-Canada Agreement) and recent US protectionist measures have cranked up export costs for key products like automobiles, auto parts, machinery, and electrical appliances.
In this tough environment, experts advocate for Mexico to diversify its export markets and fortify its domestic market to withstand trade frictions and foster a more resilient economic expansion.
Bonus Content:
- The best brew to slim down, sip on an empty stomach
- Local lowdown: the picturesque town offering top-notch cuppas and a quick escape from CDMX
- Political drama unfolds as authorities seek answers in the violent death of a high-profile duo
Related Topics
OECD Mexican economy USMCA United States mexico-news
The future of Mexico's growth in the sports industry may be at risk due to the tensions with the US, as trade barriers could deter investments and limit growth prospects. The finance and business sectors in Mexico face significant challenges, as the OECD forecasts a steep decline in 2025 and predicts a slow recovery in 2026, contingent on reducing commercial uncertainties and fostering domestic investment and consumption.
