Mexico’s economy has done rather well, thank you very much, expanding by 1.6% in the fourth quarter compared to the previous year. This was jolly well led by a robust uptick in the agriculture sector, accompanied by more modest growth in both the industrial and services sectors.
The quarterly growth outpaced the 1.3% consensus estimate from Banorte, a notable Mexican bank. They had also predicted growth at 1.5%, so pleasantly surprised they must be.
Looking specifically at the basics, the primary sector, which encompasses agriculture, fishing, mining, and indeed hydrocarbon extraction, expanded by 5.3% in the fourth quarter. This occurred despite those pesky October floods. Nevertheless, up from a 3.7% growth the previous quarter. Absolutely smashing!
As for the industrial sector, which consists of manufacturing, construction, and mining, it posted a rather stellar 2% expansion. This result hasn’t been seen since the fourth quarter of 2023, making it a tad impressive.
You see, Banorte suggests this industrial expansion is tied to a boom in new building construction, possibly linked to public infrastructure works. Manufacturing, too, seems to be on a jolly good path, especially with notable improvement in the automotive sector after previous declines.
The services sector, albeit less dramatic, expanded by 0.4%, partially reversing a 2.7% contraction from the third quarter. A bit of a turnaround, wouldn’t you agree?
Banorte pointed out that mining has made a comeback, though its performance remains rather limited at the margins.
The GDP did show signs of life despite a couple of contractions earlier in the year. This rebound raised the full-year 2025 GDP growth to 0.5%, according to preliminary estimates by the statistics agency Inegi. This comes on the heels of 1.4% growth in 2024, but highlights a fourth consecutive year of slowing annual GDP growth.
Stronger 2026 in sight
Banorte holds a rather optimistic view for 2026, stating “the notable acceleration” at the close of 2025 should carry economic momentum into the next year.
The bank specified, “This, along with various domestic catalysts, a reduction in trade uncertainty, and resilience from US economic activity, bolsters our forecast of 1.8% GDP growth in 2026.”
The catalysts mentioned include Mexico’s hosting of several World Cup matches, attracting an anticipated 5 million additional tourists. Splendid opportunity for economic merriment!
The economic plan spearheaded by Mexican President Claudia Sheinbaum, charmingly titled “Plan Mexico,” is expected to spur public spending and advance her economic agenda.
Gabriela Siller, the chief economist at Banco Base, remarked that although Mexico sidestepped a technical recession in 2025, “economic stagnation is evident.” Over seven years under the Morena party’s leadership, GDP growth has averaged a mere 0.85%. Quite the predicament, one might say.
