Quarterly economic growth in Mexico clocked in at 0.7%, surpassing predictive estimates from experts
Mexico's economy grew by 1.2% year-on-year in the second quarter of 2025, according to data released by INEGI. This growth, surpassing forecasts of about 0.8%, was driven by strong performances in the agriculture and services sectors, while industry and manufacturing showed signs of recovery.
Key contributors to this growth include a 4.5% annual growth in agriculture and a 1.7% growth in the services sector. Despite a slight contraction of 0.2% in the industry and manufacturing sector, it showed signs of quarterly recovery. These gains helped stave off a recession, reinforcing economic resilience amid challenging global conditions and trade tensions with the U.S.
The International Monetary Fund (IMF) has revised its global growth forecast upward slightly for 2025, raising the figure to 3.0% from 2.8%. Mexico-specific tariff risks remain a concern, with the IMF warning that any escalation or stricter enforcement of tariffs could negatively affect trade flows and economic prospects. However, the IMF noted that while current tariffs are burdensome, their impact has been less severe than initially feared, attributing this to Mexico’s diversified export markets and currency dynamics.
Experts warn that Mexico’s close trade relationship with the U.S. means tariffs remain a significant risk factor. If the U.S. expands tariff sectors or strictly enforces existing tariffs, this could threaten Mexico’s economic momentum and raise recession risks. Nonetheless, the fall in U.S. effective tariff rates from 24.4% to 17.3% temporarily eased some pressures on Mexican exports ahead of August 1 tariff hikes, contributing to the more positive growth outlook.
In summary, Mexico’s economy in mid-2025 is showing signs of resilience and moderate growth, buoyed by strong sectors and a favorable global trade environment thus far, but guardedly watching the U.S. tariff situation for potential disruptions. Despite the ongoing tariff uncertainties, Mexico's export revenue continues to grow, with manufacturing leading the way. As of Wednesday morning, the Mexican government has not reached a deal with the Trump administration to stave off the 30% tariff due to take effect this Friday.
References:
- INEGI Report
- IMF World Economic Outlook Update Report
- Banco Base Report
- IMF Press Release
- The strong performances in Mexico's agriculture and services sectors, as detailed in the INEGI Report, have contributed to a 1.2% year-on-year growth in the economy, surpassing initial forecasts.
- Amidst positive news about Mexico's economy, there are concerns about potential impacts from trade tensions with the U.S., as highlighted in the IMF Press Release, where they warn of potential negative effects on trade flows and economic prospects if tariffs are escalated or strictly enforced.
- While discussions between the Mexican government and the Trump administration are ongoing, as reported by various sources like the IMF Press Release and Banco Base Report, the looming threat of a 30% tariff increase on Friday continues to cast a shadow over the growth momentum in Mexico's manufacturing sector.
