Banxico Cuts Mexico's 2026 GDP Forecast to 1.1%, Citing Weak Performance

Mexico's economic outlook for 2026 has been tempered, with the Bank of Mexico (Banxico) revising its GDP growth forecast downward to 1.1%. This adjustment reflects a weaker start to the year than anticipated and concerns about the ongoing fragility of investment.

The central bank's latest Quarterly Expectations Report now places the expected GDP variation for 2026 within a range of 0.5% to 1.7%. While the forecast for 2027 has seen a slight upward revision to 2.1% from a previous estimate of 2%, the overall trajectory suggests a moderate pace of economic expansion.

Banxico anticipates a stronger economic advance in the second quarter of 2026, followed by a slower pace in the third quarter, influenced by more dynamic external demand than initially projected. However, the report highlights that investment is expected to remain weak through at least the second half of 2026.

This subdued investment climate is largely attributed to prevailing uncertainty surrounding Mexico's trade relationship with the United States and the impending review of the T-MEC trade agreement. Despite these headwinds, private consumption is expected to maintain a positive trend after a sluggish start to 2026. Exports are also projected to expand moderately, aligning with anticipated industrial production in the U.S. and supported by growth in the technology sector.