Mexico City, 20 August (Argus) — Mexico’s association of finance executives IMEF nudged its 2025 GDP growth forecast higher in its August survey, with trade tensions easing after a major US tariff hike was postponed.
IMEF increased its full-year gross domestic product (GDP) growth estimate to 0.4pc from 0.1pc held over the past three months but emphasized that growth will remain “very weak” for the rest of the year.
The uptick followed the US decision to pause for 90 days its plans to raise the flat tariff rate on Mexico to 35pc from 25pc, originally scheduled for 1 August.
“The only explanation is that these US tariffs keep getting delayed,” said Victor Herrera, IMEF’s director of economic studies. “The effective tariff rate on Mexico — while high — has changed little in recent months and remains relatively low compared to China’s.”
Mexico’s effective tariff rate stood at 5.2pc in June, according to Fitch Ratings, compared with 30.7pc for China and a 13.7pc world average. This differential has supported exports such as computer equipment, Herrera told Argus.
IMEF did not publish its monthly job creation estimate, citing anomalies in July data after Mexico’s labor reforms forced digital platforms such as Uber and Didi to formalize 1.2mn drivers and couriers.
Excluding that adjustment, Mexico’s social security institute IMSS had reported a monthly loss of 46,378 jobs in June, the fourth consecutive decline. Herrera said the trend indicates “growth in formal job creation will continue to decline.”
The group held its year-end inflation forecast at 4pc for a second consecutive month. Mexico’s consumer price index slowed to an annual 3.51pc in July from 4.32pc in June, the lowest annual headline inflation rate since December 2020, statistics agency Inegi data show.
IMEF now expects the central bank to make additional cuts to its target interest rate from the current 7.75pc to reach 7.25pc by year-end, compared with the 7.5pc projected in the July survey.
It also projects the peso to finish 2025 at Ps18.5/$, stronger than the Ps19.5/$ forecast in July. The Mexican currency traded at Ps18.3/$ Tuesday strengthening from Ps20.5/$ in April as the US dollar has weakened.
By James Young
By James Young
