Mexico Economy Contracts 0.3% in Third Quarter Amid Industrial Slowdown

Mexico's economy contracted in the third quarter of 2025, with preliminary data showing a 0.3% year-over-year decline, marking the first annual drop since early 2021. The contraction was primarily driven by a 2.9% decrease in secondary activities such as manufacturing, construction, mining, and energy, while services and commerce sectors also fell slightly despite growth in agriculture. This slowdown aligns with forecasts from various economists and institutions, reflecting challenges including trade tensions with the United States, domestic policy uncertainties, and fiscal consolidation efforts. Inflation remained within the central bank's target range, and the IMF projects modest growth of 1% in 2025 and 1.5% in 2026, urging Mexico to resolve trade issues and improve business conditions to sustain growth. The economic data underscore concerns that President Claudia Sheinbaum's growth stimulus plans have yet to reverse the downturn, with industrial activity notably weakening. Overall, Mexico faces external and internal pressures constraining its economic performance amid evolving global and regional trade dynamics.