Mexico’s financial system remains strong

In its June 2026 Financial Stability Report, the Bank of Mexico (BdeM) noted that global economic activity showed signs of stronger growth in the first quarter of the year compared to the previous period, although the escalation of hostilities in the Middle East put pressure on energy markets.

It noted that in Mexico, the economy slowed significantly in the first quarter of 2026 following some improvement at the end of the previous year. The contraction affected the primary and tertiary sectors, in addition to reversing the moderate recovery seen in the secondary sector.

It also noted that annual headline inflation rebounded between the fourth quarter of 2025 and the first quarter of 2026, driven by non-core prices, reaching 4.11% in the first half of May.

The Mexican peso followed a two-stage pattern, as it appreciated against the dollar during the first two months of the year, supported by low volatility and carry trade strategies. Starting in late February, risk aversion associated with the war caused it to depreciate, although following the announcement of a ceasefire, the greenback showed a significant recovery. The Financial Market Stress Index spiked in March due to the conflict but resumed its downward trend in April.

Total financing to the non-financial sector reached 103.9% of GDP at the end of the first quarter of 2026, with the public sector accounting for 59.9% of that total. For businesses, bank delinquency rates declined across all segments and fell below historical averages, even in sectors exposed to tariffs, with the exception of smaller companies.