Bank of Mexico lowers its economic forecast

The Bank of Mexico (BdeM) lowered its forecast for gross domestic product growth in 2026 to 1.1%, down from the 1.6% estimated in its previous report, following a sharper-than-expected contraction in the first quarter of the year, according to the January–March 2026 Quarterly Report.

The revision reflects the economy’s performance in the first three months of the year, which the bank describes as “considerably weaker than expected.”

This decline resulted from a reversal of the moderate industrial recovery seen in the final quarter of 2025 and a contraction in the services sector; primary activities partially mitigated the decline. Both job creation and labor force participation remained weak during that period.

The report notes that investment will continue to perform weakly at least through the second half of the year, pressured by uncertainty surrounding trade relations with the United States and the review of the USMCA.

In addition, private consumption, which was fragile at the start of the year, is expected to show a positive trend in the coming months. Exports are expected to maintain moderate growth, in line with US industrial production, and supported by purchases from the technology sector.