Mexico's finance executives' association IMEF kept its 2025-2026 GDP growth forecast unchanged in November but warned the growing public debt could trigger credit downgrades next year.
IMEF maintained its 2025 and 2026 GDP growth estimates at 0.5pc and 1.3pc, respectively, but stressed a high degree of uncertainty in next year's estimate, citing upcoming negotiations for the USCMA free trade agreement negotiations.
In addition, the group raised concerns over Mexico's public sector debt, which IMEF estimates at $1.067 trillion as of September, nearly double the $560bn the finance ministry reported in 2018. The total includes debt held by Mexico's state-owned energy concerns, oil company Pemex and utility CFE, with both legally established as public companies under 2024 reforms.
Announcing the renewal of Mexico's flexible credit line on 13 November, the IMF forecast the debt ratio rising to 60pc of GDP by 2030 and recommended reducing annual deficits to 2.5pc of GDP in the coming years.
"The growing debt alone is not the problem," said IMEF. "The problem is that it's growing faster than GDP." Adding to this, is the inability of Pemex and CFE to pay down their debts without federal support, said the group.
As of November 2025, Mexico's sovereign credit ratings from the major agencies are lower-medium investment grade, with Moody's rating two notches above speculative grade at Baa2 with a negative outlook. S&P Global Ratings has Mexico also two notches above speculative at BBB with a stable outlook. Fitch Ratins has Mexico just one notch above speculative at BBB- with a stable outlook.
IMEF said losing investment grade would trigger "a significant depreciation" of the Mexican peso. The group projects the peso-dollar exchange rate to close 2025 at Ps18.8/$1, compared with the Ps19.00/$1 forecast in September. The currency traded at Ps18.3/$1 on Tuesday, compared with Ps20.8/$1 in April due to weakening of the dollar this year.
Victor Herrera, IMEF's head of economic studies, said that "as positive and negative news about the USMCA begins to emerge, we could see the exchange rate moving in one direction or the other" in 2026.
IMEF lowered its year-end inflation forecast to 3.8pc in the November survey, from 4pc in October. Annual CPI eased to 3.57pc in October (from 3.76pc in September)[https://direct.argusmedia.com/newsandanalysis/article]. However, the group raised its 2026 inflation forecast to 3.9pc from at 3.8pc in its October survey. IMEF expects the central bank to cut its policy rate to 7.0pc from the current 7.25pc on 18 December, with additional cuts next year bringing the target interest rate to 6.5pc by the end of 2026.
