Mexican economic growth forecast cut to 0.20% in 2025; higher inflation expected

Experts have again cut their growth projection for the Mexican economy in 2025, from 0.50% in March to 0.20%, according to the Private Sector Economic Expectations Survey prepared by the Bank of Mexico (Banxico) for April.

Furthermore, the experts surveyed believe the economy is more likely to contract in the second quarter of 2025, with a 41% probability compared to 33% a month ago.

For 2026, Mexico's Gross Domestic Product (GDP) growth forecast was also reduced from 1.60 to 1.50 percent.

The Bank of Mexico survey is the latest to confirm a deterioration in analysts' and specialists' growth expectations, primarily due to the uncertainty generated in Mexico and the rest of the world by U.S. President Donald Trump's tariff policy.

A week ago, it was announced that in the Citi Expectations Survey, the experts consulted also lowered their forecast for Mexico's economic growth for 2025, from 0.3 to 0.2 percent.

In the first quarter of this year, the Mexican economy reportedly grew 0.2% quarterly, thus avoiding a technical recession, according to data from the National Institute of Statistics and Geography (INEGI)'s timely estimate of national GDP.

They see higher inflation

In addition, the experts surveyed slightly increased their inflation projections for Mexico by the end of 2025, from 3.70% to 3.80%, according to the most recent survey by the Mexican central bank.

Regarding core inflation (which excludes the most volatile prices, such as food and energy), they now forecast it will close this year at 3.90%, up from the 3.76% they saw in last month's survey.

For 2026, they left their inflation projection of 3.74% virtually unchanged (they forecast 3.70% in March) and 3.72% in 2027 (they also forecast 3.70% a month ago).

Despite higher inflation expectations, experts lowered their projection for the Bank of Mexico's benchmark rate at the end of 2025, from 8.00 to 7.75 percent. The benchmark rate currently stands at 9 percent.

Meanwhile, for 2026, they expect the interbank funding rate to close the year at 7.00%, up from 7.50% in the March survey.

Regarding the exchange rate, the experts surveyed expect the dollar to be trading at 20.81 pesos per dollar by the end of 2026, one cent more than in the survey conducted a month ago.

The dollar is currently trading at 19.60 pesos, so experts are predicting that the exchange rate will increase by more than 1.20 pesos, or 6%, between now and the end of the year.