OECD forecasts 1.5% GDP growth for Mexico

The Organization for Economic Cooperation and Development (OECD) has revised downward its growth forecast for Mexico's GDP this year, from 1.5% to 0.8%, as estimated in June.

This forecast is above the private-sector expectations surveyed by Citi, which stand at 1.4%, and is close to the midpoint projected by the Bank of Mexico and the Ministry of Finance, both of which are at 1.5%.

In the latest edition of the Interim Economic Outlook, the organization led by Mathias Cormann left its GDP forecast for Mexico for 2027 unchanged at 1.8%.

The forecast is below the 2% estimated by the Mexican government in the 2027 Economic Package and is in line with the market consensus compiled by Citi.

In the report, they conclude that the improved outlook for Mexico is driven by robust technological production and U.S. demand for exports.

They add that “the improved performance expected for Mexico also reflects the effect of lower interest rates.”

Similarly, inflation is expected to reach an annual rate of 4.1% this year, with the forecast reflecting an increase from the 4% projected in June. However, it is projected to moderate to 3.2% next year, bringing it closer to the Bank of Mexico’s specific target of 3%.

OECD experts predict that inflation will be contained and will slow down between now and next year, with government assistance to mitigate the impact of rising energy prices.

According to the organization’s economists, Mexico ranked 50th among the countries that implemented energy subsidies in an effort to cushion the shock of rising prices. Among them are Colombia, Peru, the United States, Japan, Hungary, Canada, Poland, Spain, and Brazil, among others.