Mexican GDP Contracts as Expected

The Mexican gross domestic product expanded by 0.8% from the previous quarter in the final three months of 2025, rebounding from the 0.3% contraction in the third quarter and ahead of market expectations of a 0.6% increase to mark the sharpest pace of growth in over one year. The rebound reflected a degree of resilience in the Mexican economy after a trade war with the United States and uncertainty regarding supply chains and lower export demand due to tariffs triggered economic headwinds in the third quarter. Growth was supported by secondary and tertiary sectors, each expanding by 0.9% Conversely, primary activities contracted by 2.7%. For the full year, the Mexican GDP grew 0.5%, the least since the pandemic caused a global economic crisis in 2020.

The Mexican GDP contracted by a seasonally adjusted 0.3% from the previous quarter in the third quarter of 2025, aligned with expectations and confirming the preliminary estimate. It was the first contraction since the last quarter of 2024, trimming the 0.6% expansion from the earlier period. Output in manufacturing industries shrank by 1.5%, pressured by uncertainty in the outlook for vehicles and key export industries amid the wave of tariffs placed by the United States, Mexico's largest export destination. In the meantime, output for primary industries jumped by 3.5%, while that for services inched 0.2% higher. From the previous year, the Mexican GDP contracted by 0.1%, its first decrease since the final quarter of 2021.

The Mexican GDP contracted by a seasonally adjusted 0.3% in the third quarter of 2025, aligned with expectations, to trim the 0.6% expansion from the previous quarter. It was only the second quarter of contraction since the emergence of Covid-19 variants triggered a contraction in early 2021, reflecting the impact of tariffs from the United States, Mexico's top trading partner. Tariffs on autos, a major industry for Mexican manufacturing, drove GDP from industry to contract by 1.5%. This offset a 3.2% expansion for primary industries, which were supported by higher silver prices, and a near stall for services. From the previous year, the Mexican GDP contracted by 0.2%, the first contraction since the first quarter of 2021.