Mexico GDP Contracts More than Expected

The Mexican GDP contracted by 0.8% from the pervious quarter in the first quarter of 2026, erasing the 0.9% expansion from the final quarter of last year to overshoot the expectations that the economy would contract 0.5%. The contraction was in line with projections by the Bank of Mexico, that resumed their interest rate cutting cycle despite the aggressive rebound in inflation from March. Output contracted 1.4% for primary activities despite the surge in silver and energy prices. Meanwhile, production fell 1.1% for the secondary sector as manufacturers continued to adjust to tariffs from the US, cutting a key source of demand for auto producers. In turn, services output fell by 0.6%. The GDP inched higher by 0.1% from the previous year.

The Mexican gross domestic product expanded by 0.9% from the previous quarter in the final three months of 2025, rebounding from the 0.3% contraction in the earlier period and revised higher from the preliminary estimate of 0.8% growth to mark the sharpest pace of expansion 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 1.4%. For the full year, the Mexican GDP grew 0.6%, the least since the pandemic caused a global economic crisis in 2020.

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.