World Bank Cuts Mexico's 2027 GDP Forecast, Citing T-MEC Risks and Pemex Burden

The World Bank has revised down its economic growth forecast for Mexico in 2027, projecting a 1.7% GDP increase. This adjustment, a 0.1 percentage point reduction from previous estimates, is attributed to potential headwinds from upcoming T-MEC negotiations, which could dampen exports and investment, and the financial strain posed by the state-owned oil company Pemex.

The international financial institution maintained its forecast of 1.3% GDP growth for Mexico in 2026 and anticipates a 1.9% growth in 2028. These figures place Mexico's economic expansion below the World Bank's projected averages for Latin America and the Caribbean, which are 2.2% for 2026, 2.5% for 2027, and 2.6% for 2028.

Furthermore, the World Bank expects Argentina to outperform Mexico in terms of growth, forecasting 3.6% for the current year, 3.7% for 2027, and 3.5% for 2028. Brazil's economy is projected to grow at 1.9% in 2026, 2% in 2027, and 2.2% in 2028.

The report notes that Mexico's economic activity contracted at the beginning of the year, influenced by weaker external demand and significant uncertainty surrounding trade policy. While Mexico's exposure to energy price shocks is considered limited due to its balanced energy trade position and fiscal measures, its economic outlook remains closely tied to domestic demand and foreign trade conditions, particularly with the United States and the T-MEC review.