The Mexican economy is facing significant challenges as it officially enters a technical recession, according to a recent analysis by economists at Citi. This downturn is marked by two consecutive quarters of decline in the Gross Domestic Product (GDP), with a decrease of 0.6% in the fourth quarter of 2024, followed by a further contraction of 0.4% in the first quarter of 2025.
In light of these developments, Citi has revised its projections for the Mexican economy, forecasting a meager growth of only 0.2% by the end of 2025. Specifically, they project growth rates of 0.2% for the second quarter (April-June), 0.4% for the third quarter (July-September), and another 0.4% for the final quarter of the year (October-December).
The International Monetary Fund (IMF) has also adjusted its growth forecasts downwards, anticipating a contraction of 0.3% for Mexico in 2025. This marks a significant downgrade from the 2% growth it projected back in January. The World Bank, in its recent report published on April 23, 2025, echoed similar sentiments, projecting a growth rate of zero for Mexico this year, a sharp decline from its earlier estimate of 1.5%.
On April 22, analysts from banking institutions and brokerage houses, as part of the Citi Expectations Survey, adjusted their growth forecast for 2025 to 0.2%, with estimates ranging from a contraction of 0.7% to a growth of 0.8%. This marks the fifth consecutive survey in which growth expectations for 2025 have been lowered.
In contrast, the Mexican government maintains a more optimistic outlook. President Claudia Sheinbaum has dismissed the notion of a recession in Mexico, while Treasury Secretary Edgar Amador projects a growth range of between 1.5% and 2.3% for 2025, and between 1.5% and 2.5% for 2026.
The persistent forecasts of recession highlight the underlying weaknesses in the Mexican economy, particularly in light of the tariffs announced by U.S. President Donald Trump. The severity of these tariffs and their duration will play a crucial role in determining the extent of economic decline. If tariffs are reduced or their implementation is shortened, it could potentially yield a positive effect on economic performance.
As discussions around economic forecasts continue, the situation surrounding Banorte and its interest in acquiring Banamex has also garnered attention. Initially, reports suggested that Banorte was considering a bid for Banamex, which recently spun off from Citigroup. However, as the day progressed, Banorte clarified that its CEO, Marcos Martínez, stated the bank is obligated to analyze market options but does not necessarily intend to make an immediate offer for Banamex.
Martínez remarked, “Our duty is to observe and analyze what is in the market, and it will be the shareholders, the owners of the company, who will decide.” He emphasized that Banorte is closely monitoring the evolving situation, indicating that while they are attentive to market dynamics, there is no specific plan to acquire Banamex at this time.
Citi Group has reiterated its intention to sell Banamex through the stock market by the end of this year, although this process could be postponed until 2026. As the timeline progresses, it is likely that other banks will express interest in acquiring Banamex, particularly as the market landscape continues to shift.
Meanwhile, the IMF's recent downward revision of global economic growth projections has raised concerns. Initially, in January, the IMF had predicted global GDP growth of 3.3% for 2025 and 2026, with the U.S. economy expected to grow by 2.7% and 2.1%, respectively. However, after the recent announcements, the IMF now forecasts a global growth rate of 2.8% for this year and 3.0% for 2026, with the U.S. economy projected to grow by 1.8% and 1.7%.
The IMF attributed these adjustments to heightened political uncertainty, trade tensions, and more moderate demand prospects in the U.S. market, which have contributed to slower-than-expected consumption growth. For Mexico, the IMF’s revisions reflect a significant downgrade in growth expectations, primarily due to weaker-than-anticipated economic activity in late 2024 and early 2025.
In light of these developments, the Mexican government faces increasing scrutiny over its economic policies. Critics argue that the government's optimistic outlook does not align with the realities presented by independent economic forecasts. The OECD recently projected a contraction of 1.3% for Mexico, a forecast that generated considerable discontent within the government.
President Sheinbaum has expressed frustration over what she perceives as a lack of consideration for the effects of the Mexican Plan in these projections. As the nation grapples with these economic challenges, the upcoming release of the timely economic indicators on April 30 will be crucial in assessing the current state of the economy.
In summary, while the Mexican government continues to project optimism regarding economic growth, independent forecasts paint a more pessimistic picture. The interplay between tariffs, international economic conditions, and domestic policies will be critical in shaping Mexico's economic landscape in the coming years.
