Mexico’s economy faced significant challenges throughout 2024, marking its slowest growth since the pandemic recovery began. According to the Instituto Nacional de Estadística y Geografía (Inegi), the Gross Domestic Product (GDP) of Mexico grew at just 1.24 percent—a stark decline compared to previous years and falling short of international projections.
The year ended on a low note, with GDP growth slightly revised down to 0.5 percent for the fourth quarter, which was lower than the initial estimate of 0.6 percent. Experts had anticipated more significant growth; the International Monetary Fund (IMF) had projected 1.8 percent, and the World Bank predicted 1.7 percent. Instead, the last quarter saw the GDP contract by 0.63 percent, the worst economic performance since the first quarter of 2021.
Gabriela Siller, the director of economic analysis at Grupo Base, highlighted concerning trends within the primary and secondary sectors, which are experiencing unprecedented declines. “The primary activities, such as agriculture and livestock, contracted by 2.07 percent over the year, marking two consecutive years of decline for the first time since 1988 and 1989,” Siller noted. Meanwhile, secondary activities, which include construction and manufacturing, only grew by 0.06 percent over the year, reflecting the weakest performance since 2000, when these sectors contracted by 9 percent. It’s particularly alarming, as manufacturing constitutes about 65 percent of secondary activities and around 20.5 percent of the total GDP.
Despite these challenges, the tertiary sector—comprised of trade and services—managed to record some growth, increasing by 2.14 percent, albeit down from 3.43 percent observed the previous year. This sector continues to provide some stability, but the reduced growth rate raises questions about the overall economic vitality heading forward.
Looking at future expectations, the outlook remains grim. Victoria Rodríguez Ceja, Governor of the Bank of Mexico, adjusted the growth projection for 2025 down to just 0.6 percent from the previously estimated 1.2 percent. Analysts attribute this lack of momentum to declining consumer spending and private investment, largely stemming from uncertainty linked to potential U.S. tariffs on Mexican goods.
The GDP performance over the course of 2024 averaged only 1.2 percent year-on-year, marking the least dynamic rate seen since the recovery from Mexico's severe contractions during the pandemic. Notably, 2021 registered strong growth at 6.3 percent, which was followed by 3.3 percent growth in 2023. These figures signify a downward trend, as 2024’s performance is the weakest since 2020’s contraction.
The arrangement of these economic outcomes showcases not only the constructed expectations but also levels of resilience tested by international economic affairs. Economists are emphasizing the need for urgent reforms to stimulate domestic investment and consumption, especially as external pressures—like the looming potential tariffs from the United States—could exacerbate the existing weaknesses.
Overall, the data points toward a challenging economic environment with no immediate solutions apparent. With each passing quarter showing such restrained growth, stakeholders across the spectrum—from investors to everyday consumers—will be keeping a close watch on the projections as 2025 approaches.