Mexico's finance executives association IMEF left its 2026 GDP growth forecast unchanged at 1.3pc in its February survey but warned that the outlook depends heavily on the 1 July deadline to renew the US-Mexico-Canada (USMCA) free trade agreement.
IMEF has maintained the 1.3pc forecast since introducing the USMCA question in July 2025, assuming the treaty will be renewed.
"It is based on current circumstances that assume renewal of the USMCA," said Victor Herrera, IMEF's director of economic studies, during the 17 February presentation.
The US, Mexico and Canada are set to hold a joint review on 1 July, marking six years since the treaty took effect. They could agree to extend it through 2036, with a review in 2032. Formal talks began in September 2025, and while some milestones have been completed, key issues remain unresolved with 132 days before the review.
Herrera described recent threats by US president Donald Trump to leave the treaty as "probably a negotiating tactic," but noted growing concerns over "the possibility that the US might not want to reach an agreement by 1 July, and we would enter a phase that would generate a lot of uncertainty."
"Once we get past 1 July, the forecasts change and economic conditions will gradually worsen for every month no resolution is reached," Herrera told Argus after the event. "Investment will not pick up until that renewal is final."
If no agreement is reached, the next formal renewal window under USMCA law would be July 2027, though an informal deal could emerge earlier.
Prolonged uncertainty would weigh on the peso, Herrera said, increasing the cost of state-owned Pemex's largely foreign-currency debt and adding pressure on federal finances.
Reflecting recent currency strength, IMEF now expects the peso to close 2026 at Ps18.5/$1, stronger than its Ps19/$1 forecast in December. After appreciating 16pc against the dollar in 2025, the peso has gained a further 5pc this year, reaching Ps17.16/$1 on 18 February.
IMEF raised its 2026 inflation forecast slightly to 4pc from 3.95pc previously. This follows the central bank's 5 February decision to pause its rate-cut cycle and hold the policy rate at 7pc, citing higher-than-expected core inflation. Headline inflation rose to 3.79pc in January from 3.69pc in December, while core inflation accelerated to 4.52pc.
IMEF still expects two rate cuts in the first half of 2026, bringing the policy rate to 6.5pc by year-end. Its 2027 estimates were largely unchanged, with GDP growth at 1.8pc and inflation at 3.85pc.
