Mexican Economy: Inflationary and Exchange Rate Challenges

Economic projections for Mexico in 2025, according to the Ministry of Finance and Public Credit ( SHCP ) and the Bank of Mexico ( Banxico ), anticipate moderate GDP growth, but with inflation and the exchange rate presenting key challenges to economic stability.

Mexico's economic outlook for 2025, according to projections from the Ministry of Finance and Public Credit (SHCP) and the Bank of Mexico (Banxico), outlines a scenario of moderate growth, but with significant challenges in terms of inflation and the exchange rate. The General Economic Policy Criteria for 2025 (CGPE-25) estimate annual real Gross Domestic Product (GDP) growth of between 2.0% and 3.0%, with 2.3% for public finance estimates. However, private sector specialists consulted by Banxico project a slight slowdown, with growth of 2.0% for next year.

Inflation remains a key concern. The SHCP forecasts that annual headline inflation will reach 3.5% by the end of 2025. This figure remains above the Bank of Mexico's inflation target of 3.0% and its variability range (2.0-4.0%). Meanwhile, private sector analysts, in the Banxico Survey, expect an annual increase in consumer prices of 3.9% in December 2025. As of June 1, 2025, the inflation rate already registered 8.477485, showing an upward trend in the first days of the month.

Regarding the exchange rate, the CGPE-25 estimates that the nominal exchange rate will reach 18.5 pesos per dollar by the end of 2025, with an annual average of 18.7 pesos per dollar. However, private sector experts in the Banxico Survey are more conservative, projecting a closing rate of 20.06 pesos per dollar for 2025, a figure higher than that estimated by the SHCP.

The nominal interest rate on 28-day CETES is forecast at 8.0% at the end of 2025, according to the SHCP (Ministry of Finance and Public Credit), while private analysts estimate it to be slightly higher at 8.17%. Regarding the current account, a deficit of $7.941 billion is projected for 2025, equivalent to (-)0.4% of GDP, although private analysts anticipate a larger deficit.

One factor that could negatively impact investment, particularly nearshoring, is the uncertainty generated by U.S. protectionist policies, such as tariffs on steel and aluminum, and the perception of a possible subordination of the judiciary to the executive branch.

Key economic projections for Mexico 2025

The persistence of inflation above Banxico's target implies a continued erosion of citizens' purchasing power and a challenge for monetary policy. The possible depreciation of the peso, although not drastic, makes imports more expensive and could further fuel inflation. These factors, combined with uncertainty about trade relations with the United States (tariffs) and judicial independence, create a less attractive environment for foreign direct investment, especially for nearshoring, which is a key asset for growth.

Mexico's economic outlook for 2025 is shaping up to be a period of complex management, where internal macroeconomic stability is threatened by inflationary pressures and a potential currency weakness, exacerbated by external factors such as U.S. tariff policies and the perception of a lack of legal certainty. This implies that the new government must not only focus on prudent fiscal and monetary policies but also on strengthening investor confidence by ensuring a stable and predictable legal framework, crucial for capitalizing on nearshoring opportunities and ensuring long-term growth.

"By the end of 2025, [the CGPE-25] consider [inflation] to reach a level of 3.5%" — Gazette of the Chamber of Deputies.