Economics: Development banking in Mexico—a persistent deterioration

MEXICO - Report 15 Jun 2026 by Mauricio González and Francisco González

Although development banking is one of the main pillars for achieving the goals of Plan México and the Infrastructure Investment Plan for Development with Wellbeing announced by President Sheinbaum as the strategies to reactivate investment and economic growth, in practice development banking has suffered persistent weakening and faces major challenges to its recovery. A series of misguided policies has driven a brain drain from these institutions and a deterioration in their indicators, resulting in a loss of dynamism in development banking.

In fact, the real loan portfolio balance of development banks fell between 2021 and March 2026 at an average annual real rate of -2%, a figure that contrasts with the growth recorded by commercial banks and other non-bank financial intermediaries. This report analyzes the recent evolution of development banking and its implications.

Regarding this week’s indicators, industrial production was reported to have risen 2.1% month on month and 1.8% year on year in April. As a result, industrial activity contracted 0.2% in January–April 2026 compared with the same period of the previous year.

Consumer inflation was reported at 3.93% year on year in May, versus 4.45% in April. This decline was driven by a sharp drop in the non-core component, to 3.1% from 5.08% in April. Meanwhile, progress in the core component this year has been marginal, having fallen by just 14 basis points in five months; its January–May average of 4.38% remains above Banxico’s tolerance ceiling. The risks of persistently high core inflation remain, particularly due to second-round effects from rising energy costs on transportation, basic metals, and other items that could materialize in the coming months.

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