The IMF Anticipates a Downturn in Mexico's Economy by 2025
According to the updated global economic outlook from the International Monetary Fund (IMF), a contraction in the Mexican economy is expected in 2025, significantly contributing to the projected slowdown in GDP growth across Latin America and the Caribbean for this year. The IMF now estimates that economic growth in the region will be 2.0% in 2025, compared to the 2.4% recorded last year, and a decrease from the 2.5% projected in January.
The IMF noted that "the revisions are primarily a result of a significant reduction in growth in Mexico." This "is due to weaker-than-expected economic activity at the end of 2024 and the beginning of 2025, in addition to the impact of tariffs imposed by the United States, the associated uncertainty, geopolitical tensions, and a tightening of financing conditions." In this regard, the Mexican economy, closely tied to the U.S. economy, is expected to experience a decline of 0.3% this year, instead of the 1.4% expansion that was previously anticipated, due to the negative effects on exports from U.S. tariffs. On the other hand, Brazil, the largest economy in the region, is expected to slow to a growth rate of 2.0%, down from the 2.2% estimated in January. In contrast, Argentina is projecting a growth rate of 5.5% in 2025, exceeding the 5% forecasted in January. Additionally, Colombia is expected to grow by 2.4%, Chile by 2.0%, and Peru by 2.8%. For Central America, a growth rate of 3.8% is projected for this year, slightly lower than the 3.9% predicted for 2024, while the Caribbean economy is expected to slow to 4.2% in 2025, compared to 12.1% the previous year. Finally, the IMF has also lowered its global economic growth expectation for 2025, reducing it from 3.3% to 2.8%, influenced by the rise in U.S. tariffs to levels not seen in a century, leading to reduced projections for most countries.
It is concerning to see how the Mexican economy could face a contraction, particularly given the importance of trade relations with the United States. If appropriate strategies are not implemented to diversify markets and strengthen the internal economy, future outlooks could become even more uncertain. Investing in innovation and improving infrastructure should be a priority to prevent further economic crises.
