The Mexican finance executive association (IMEF) lowered its 2025 GDP growth forecast for a second consecutive month in its April survey, citing a rising risk of recession on US-Mexico trade tensions.
In its April survey, growth expectations for 2025 fell to 0.2pc, down from 0.6pc in March and 1pc in February.
Nine of the 43 respondents projected negative growth — up from four in March, citing rising exposure to US tariffs that now affect "roughly half" of Mexico's exports.
The group warned that the risk of recession will continue to rise until tariff negotiations are resolved, with the possibility of a US recession compounding the problem. As such, IMEF expects a contraction in the first quarter with high odds of continued negative growth in the second quarter — meeting one common definition of recession as two straight quarters of contraction.
Mexico's economy decelerated in the fourth quarter of 2024 to an annualized rate of 0.5pc from 1.7pc the previous quarter, the slowest expansion since the first quarter of 2021, according to statistics agency data.
Mexico's statistics agency Inegi will release its first estimate for first quarter GDP growth on April 30.
"A recession is now very likely," said IMEF's director of economic studies Victor Herrera. "Some sectors, like construction, are already struggling — and it's just a matter of time before it spreads."
The severity of the downturn will depend on how quickly trade tensions ease and whether the US-Mexico-Canada (USMCA) free trade agreement is successfully revised, Herrera added. But the outlook remains uncertain, with mixed signals this week — including a possible pause on auto tariffs and fresh warnings of new tariffs on key food exports like tomatoes.
IMEF also trimmed its 2026 GDP forecast to 1.5pc from 1.6pc, citing persistent tariff uncertainty. Its 2025 formal job creation estimate dropped to 220,000 from 280,000 in March.
The group slightly lowered its 2025 inflation forecast to 3.8pc from 3.9pc, noting current consumer price index should allow the central bank to continue the current rate cut cycle to lower its target interest rate to 8pc by year-end from 9pc.
IMEF expects the peso to end the year at Ps20.90/$1, slightly stronger than the Ps21/$1 forecast in March.
