Mexico’s economy recorded a modest growth of 0.2% in the first quarter of 2025, surpassing analysts’ expectations and narrowly avoiding a technical recession. This growth follows a 0.6% contraction in the final quarter of 2024. The expansion was primarily driven by an 8.1% increase in the primary sector, which includes agriculture, fishing, and mining.
Despite this positive development, challenges persist. The manufacturing sector experienced a 0.3% decline, and the services sector remained stagnant. Year-over-year, the economy grew by 0.8%, slightly above the anticipated 0.6%.
Economists express caution, citing ongoing trade tensions with the United States, particularly due to President Donald Trump’s tariff policies, as significant risks to sustained growth. These external pressures, combined with domestic uncertainties and restrictive financial conditions, contribute to a challenging economic outlook.
In response to these challenges, the Bank of Mexico has implemented interest rate cuts, bringing the benchmark rate down to 9.00%. This monetary easing aims to stimulate economic activity amid cooling inflation and global economic headwinds.
President Claudia Sheinbaum remains optimistic, emphasizing public investment and infrastructure projects as key drivers for economic stability. Her administration’s “Plan Mexico” focuses on bolstering domestic industries to mitigate the impact of external shocks.
While the first quarter’s growth offers a reprieve from recession fears, the path ahead remains uncertain. Sustained efforts in policy implementation and economic diversification will be crucial for Mexico to navigate the complex global economic landscape.
