Mexico's economy expanded by 1.6pc in the fourth quarter from a year earlier, led by solid expansion in the agriculture sector and more modest growth in the industrial and services sectors.
Gross domestic product (GDP) rebounded from the 0.1pc contractions in the second quarter and third quarters — the first quarterly contractions since the first quarter of 2021, and came in above estimates to raise full-year 2025 GDP growth to 0.5pc, according to preliminary estimates that statistics agency Inegi reported Friday. This follows 1.4pc growth in 2024 and marks a fourth year of slowing annual GDP growth.
The quarterly expansion surpassed the 1.3pc consensus estimate provided by Mexican bank Banorte as well as the bank's own 1.5pc forecast.
Looking at growth in the three basic components of GDP, the primary sector, which includes agriculture, fishing, mining and hydrocarbon extraction, expanded by 5.3pc in the fourth quarter, despite crop damage from widespread flooding in October, following 3.7pc growth in the third quarter.
The services sector expanded 0.4pc, partially reversing the 2.7pc contraction recorded in the third quarter.
The industrial sector, which includes manufacturing, construction and mining, posted a 2pc expansion — the strongest result since fourth quarter 2023.
Banorte noted the expansion in the industrial sector is most likely linked to new building construction and possibly the ramp-up of public infrastructure works.
Manufacturing support in the industry sector "appears to have been favorable" though mixed by segment, even as the automotive sector "seems to have improved after declining in previous quarters."
"Finally, mining also appears to have rebounded, although with a more limited performance at the margin," said Banorte.
Gabriela Siller, chief economist at Banco Base, noted that while Mexico escaped a technical recession in 2025 "economic stagnation is evident," noting that GDP growth has averaged only 0.85pc in the last seven years that the populist-progressive Morena party has held control of congress and the presidency.
Stronger 2026 in sight
Banorte, however, said "the notable acceleration" at the end of 2025 translates to a stronger carry-over of economic momentum into 2026.
"This, coupled with various domestic catalysts, our view of lower trade uncertainty, and of resilience in US activity, support our forecast of 1.8pc GDP growth [in 2026]," the bank said Friday.
The catalysts include Mexico's hosting of multiple World Cup matches — drawing an expected 5mn additional tourists this year, as well as an acceleration in public spending, as Mexican president Claudia Sheinbaum advances her economic agenda, "Plan Mexico."
