Mexico Mid-Year Outlook: Top 10 questions answered

Research evidence excerpt

Mexico Mid-Year Outlook: Top 10 questions answered

16 July 2026

Mexico Mid-Year Outlook EconomicsMexico

Top 10 questions answered

◆ The USMCA review takes center stage amidst a challenging Jose Carlos Sanchez

external backdrop, disappointing growth, and volatile inflation ChiefHSBCEconomist,Mexico, S.A.,MexicoInstitucion de Banca Multiple, Grupo

Financiero HSBC

◆ This bundle makes monetary policy and fiscal outlook blurrier, jose.c.sanchez@hsbc.com.mx

+52 55 5721 5623

but creates opportunities given what is priced in by markets

Prachi Mathur

Trade Economist

◆ We address the most frequent questions from investors on the HSBC Securities and Capital Markets (India) Private

Limited

country’s economic prospects and key themes for H2 2026 prachi.mathur@hsbc.co.in

+91 86 5524 5059

After the Mexican economy disappointed in H1 2026, the agenda for H2 is getting

busier. The USMCA review kicked off on 1 July, as the US opted for annual reviews of

the pact. This could buy more time to negotiate, as the current framework will remain

in place at least until 2036, proving supportive for Mexican exports. However, the

uncertainty of the final USMCA outcome prevails, weighing on investment flows.

This, along with contained consumption, could prompt slower GDP growth. We see a

bounce in Q2 2026, led by one-off shocks, followed by a return to modest growth in

H2 2026. The main upside risk for a sustained recovery is the multi-annual investment

plan, which relies on private investment and policy support from the government.

We remain cautious on inflation, as the relief seen in Q2 is likely not indicative of how

the trend will look in H2 2026. This could limit the room to cut rates further, even if the

bias of the central bank (Banxico) is to the downside. We do not anticipate rate hikes.