According to The Wall Street Journal, the Bank of Mexico lowered its expectation for economic growth this year after a third-quarter contraction that it said showed greater weakness in activity than previously expected.
In its quarterly report Wednesday, the central bank said it expects gross domestic product to expand 0.3% this year, less than its previous estimate of 0.6%. For 2026, the bank kept its growth estimate at 1.1%.
Private consumption is expected to trend higher, while investment will remain weak “at least until the second half of 2026” given uncertainty over trade relations with the U.S. and the revision of the U.S.-Mexico-Canada Agreement, the central bank said.
“Nevertheless, exports will continue to show growth, although moderate, in line with the expected performance in U.S. industrial production,” the bank added. Mexican exports have benefited from preferential tariff treatment under the USMCA and strong U.S. demand for computer equipment associated with the artificial intelligence boom, the bank said.
In the third quarter, Mexico’s GDP contracted 0.3% in seasonally adjusted terms from the second quarter, led by a drop in industrial output, and was down 0.2% from the year-earlier quarter.
Sluggish economic growth has been frequently cited by the central bank in cutting interest rates this year. The bank lowered its benchmark interest-rate target to 7.25% from 7.5% on Nov. 6 in an 11th consecutive cut, and is widely expected to cut the rate to 7% in December.
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Source: The Wall Street Journal
