The Mexican economy may face a slowdown in 2025, with a scenario of zero growth or even contraction possible, according to the Mexican Institute of Financial Executives (IMEF). While the forecast for this year’s GDP growth stands at 1.5 percent, estimates for 2025 have been revised downwards to 1.3 percent. This data was revealed in IMEF’s latest September survey, which signals growing uncertainty in Mexico’s economic outlook.
The IMEF’s president, José Domingo Figueroa, spoke at a recent press conference, addressing the economic challenges the country could face in the near future. “If constitutional reforms continue, particularly the disappearance of autonomous organizations and the threat to Mexico’s permanence in the United States-Mexico-Canada Agreement (T-MEC), economic growth could slow significantly,” he stated. Figueroa emphasized that, under these circumstances, growth could stagnate or even turn negative by 2025.
Downward Trends in Job Creation
One of the primary concerns highlighted by IMEF is the impact on job creation. As economic growth slows, so too does the pace of job creation. According to the September survey, Mexico is projected to create around 425,000 new jobs in 2024—down from the 480,000 projected in July. Looking ahead to 2025, the estimate for new jobs is lower still, at 405,000, a notable decrease from the 450,000 forecasted just a month earlier.
This anticipated reduction in job creation is significant, especially when compared to 2023, during which 700,000 jobs were generated. Figueroa explained that slower economic growth would likely result in a continuing decline in job creation, which could have broader implications for the country’s workforce and overall economic stability.
Threats to Investor Confidence and the Relocation Opportunity
Another major concern raised by IMEF is the judicial reform currently being considered by Mexico’s government. Figueroa warned that the reform, as it stands, could further undermine investor confidence in the country’s institutions and legal security. “Investors need confidence in the rule of law and autonomous organizations to make long-term commitments. The uncertainty generated by these reforms could deter the foreign investments Mexico needs,” he said.
This hesitation among investors could slow down or delay the relocation of companies—an opportunity that Mexico has recently benefited from, particularly as many international businesses have been looking to relocate operations due to global supply chain shifts. Figueroa noted that this missed opportunity would make it even more difficult for Mexico to break through the 2 percent GDP growth threshold, a figure that has been the average growth rate for the country over the past two decades.
The Broader Economic Picture
The forecasts presented by IMEF reflect broader concerns about Mexico’s economic trajectory. While the global economy faces numerous uncertainties, Mexico’s particular challenges, such as domestic reforms, legal security concerns, and international trade agreements like T-MEC, are key factors that could influence the country’s future growth.
Many specialists believe that the economic landscape will depend heavily on how the Mexican government navigates these reforms and whether it can foster a climate of confidence for both domestic and foreign investors. Should reforms continue to diminish autonomous institutions, or should tensions arise within the framework of the T-MEC, the chances of economic contraction in 2025 could increase significantly.
Figueroa’s remarks point to the need for prudent policy-making. “Economic growth requires more than just favorable market conditions; it requires institutional stability, clear legal frameworks, and a commitment to international agreements,” he emphasized. He called for caution in implementing reforms that could have long-term repercussions on Mexico’s financial and investment environment.
Looking Ahead: The Path to Growth
Despite the challenges ahead, there are still opportunities for Mexico to navigate the current economic uncertainties. Proponents of further economic reforms argue that simplifying regulations and reducing government oversight could unlock growth potential. However, the IMEF’s position underscores the importance of maintaining institutional independence and protecting investor confidence as critical factors for sustainable growth.
In the coming months, all eyes will be on the Mexican government’s decisions regarding constitutional reforms and its commitment to international trade agreements. These decisions will not only impact Mexico’s economic performance but also its standing as a key player in the global economy.
As Mexico approaches 2025, the road ahead remains uncertain. Whether the country will be able to stabilize its growth or face economic contraction will depend on a delicate balance of political, legal, and economic factors. What is clear is that cautious optimism and strategic policy-making will be essential in determining Mexico’s economic future.
Sources:
- Mexican Institute of Financial Executives (IMEF)
- IMSS