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Mexico Growth Outlook Trimmed to 0.5% as Q3 GDP Slips and Confidence Weakens

Lower inflation expectations point to interest-rate cuts later this year from Banxico.

Overview

  • In a preliminary reading, INEGI reported a 0.3% quarter-on-quarter GDP decline in Q3, led by a 1.5% drop in secondary activities and persistent mining and petroleum weakness.
  • Banxico’s monthly survey shows private forecasters now expect 2025 growth of 0.50%, year-end inflation near 3.8%, and the policy rate easing toward roughly 7.05%.
  • INEGI’s global business confidence index fell 0.8 points in October to 48.6, marking eight months below the 50 threshold, with manufacturing confidence at 49.1 and investment views deteriorating.
  • Sector pressures include prolonged declines in oil production and auto-industry disruptions, with temporary stoppages reported at Honda’s Celaya plant and Audi’s Puebla facility.
  • Leading gauges were mixed, as IMEF manufacturing improved to 47.2 but stayed in contraction and the non-manufacturing index edged to 50.4, signaling only tentative stabilization.