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Mexico's Economy Shrinks 0.3% in Q3 as Sheinbaum Cites U.S. Tariff Fallout

Sheinbaum calls the industrial-led dip a short-lived tariff shock.

Overview

  • INEGI’s preliminary figures show GDP fell 0.3% quarter-on-quarter and year-on-year in Q3, the first annual decline since early 2021.
  • The secondary sector led the downturn with industrial activity down 1.5% from Q2 and 2.9% from a year earlier, while primary activities rose 3.2% and services edged up 0.1%.
  • Sheinbaum says the tariff effects surfaced with a lag in the second half and expects a rebound toward late 2025, citing SHCP and Banxico analyses that frame the setback as confined to the third quarter.
  • Addressing autos, she said recent plant shutdowns reflect discontinuation of certain models rather than tariff-driven exits and insisted automakers are not leaving Mexico.
  • Private forecasters now see full‑year 2025 growth near 0.5%, pointing to structural constraints such as weak investment, lower Pemex output and limited electricity capacity.