Mexico economy to grow less than previously expected on trade concerns

Mexico’s economy is expected to grow more slowly this year and next than previously forecast, driven by ongoing concerns about trade rules with the United States, according to a Reuters poll of economists. The median forecast from 32 economists (polled July 13–17) calls for GDP growth of 1.1% in 2026 and 1.8% in 2027, down from April’s consensus of 1.5% and 1.9%. Growth in 2025 was only 0.5%. Weak industrial production is also expected, with analysts citing government measures to partly offset reduced private investment. Uncertainty rose after Washington declined to extend USMCA for 16 years, choosing a 10-year term with annual reviews. Analysts say the auto sector could be especially sensitive due to proposed changes to rules of origin. Inflation is seen steady near the central bank’s upper target range, and the policy rate at 6.50% likely through end-2027.