Mexico: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Mexico

The 2025 Article IV Consultation with Mexico discusses that economic activity has been soft since mid-2024 as the economy confronted capacity constraints, fiscal consolidation, and restrictive monetary policy. Activity is expected to accelerate somewhat in 2026 as the restraint from fiscal and monetary policies diminishes but the effect of tariffs and trade uncertainty will continue to weigh on growth. Given social spending and public investment needs, reducing the deficit requires mobilizing revenues through administrative improvements and tax policy changes. Strengthening the fiscal framework would increase the credibility of fiscal plans. Further monetary easing should be conditioned on clear evidence that inflation is on a path back to the central bank’s inflation target. Mexico’s financial sector is sound and systemic risks are contained. Banks’ exposure to the export sector appears limited, and corporate and household balance sheets are healthy. Strengthening governance and tackling crime will be key to foster growth. Open trade is essential to ensure Mexico remains an attractive destination for investment and a core part of global supply chains.