Mexico midyear outlook: Winding road is still uphill

Research evidence excerpt

Mexico midyear outlook: Winding road is still uphill

out- note and contracted 2.4%saar in 1Q26 even with private con-

look, or the mid-term view. We expect growth at 1.4% y/y sumption regaining some lost ground.

this year and 1.7% in 2027. This path would keep the 10-year

average at 1.1%, below our 1.5% estimate for potential. To be fair, concerns regarding the health of the economy were

not only about low growth, but also a volatile path that

We argued recently that a change towards a more optimistic reflected new and lingering challenges (mostly geo-econom-

stance would be subject to a compelling delivery of the ic), restrictive monetary conditions, and poor policy planning

revamped economic plan from the government. Equally — evidenced, for starters, in the execution of construction

important, easing global and regional uncertainties related to plans (Figure 3).

trade tensions would pave the way for a recovery in sentiment

and better growth prospects in the medium term. Instead, Figure 3: Infrastructure political cycles

slow progress on the economic plan and the validation of the Index, t = 100; Start of each presidential term

start of annual reviews for the USMCA have now confirmed 170 2019-24

2007-12 (AMLO)

our fears of a protracted recovery beyond this year. 150 (FCH)

Figure 1: Real GDP

MXN tn, sa 110

27 90 2025-30

2013-18

26 70 (CSP) (EPN)

25 50

24 t t+10 t+20 t+30 t+40 t+50 t+60 t+70

23 Source: J.P. Morgan with data from INEGI

21 The see-saw in construction in the last couple of years contin-

20 ues to reflect, on the one hand, the delayed allocation of infra-

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 structure projects from the government and, on the other, a

Source:J.P. Morgan with data from INEGI stronger momentum in private construction, followed last