Economics: A stalling 2025 economy foreshadows a slow recovery in subsequent years

MEXICO - Report 15 Dec 2025 by Mauricio González and Francisco González

The Mexican economy is sputtering, as underscored by GDP slipping -0.2% yoy in the third quarter, leaving its average performance through September at a paltry 0.4%. Were it not for export growth, the Mexican economy would have fallen into recession during 2025. Even as exports and foreign investment have played out better than expected, situations that are not conducive to economic progress have arisen in the wage-employment tandem.

There is both an evident lack of demand for goods and services domestically and an ongoing plummeting of GFI investment, components that account for about 85% of GDP. Businesses are growing increasingly pessimistic about investing, and the government is bereft of any means to lure the private sector into becoming seriously engaged in infrastructure projects.

The ongoing weakening of public finances is apparent in already high and steadily climbing levels of public debt in both pesos and foreign currency. And new risks loom on the horizon due to inadequate management of interest and foreign exchange rates, which could trigger a significant, although not catastrophic, weakening of the exchange rate.

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