Banxico: Uncertainty clouds Mexico's economic horizon – El Financiero

• Public safety and the policies implemented by the United States are a source of concern for businesses.
• Central bank warns slowdown could deepen; urges investment boost amid weakening demand and trade tensions

Banco de Mexico (Banxico) Director of Economic Research Alejandrina Salcedo Cisneros said that uncertainty is having a widespread impact on the country's businesses, so the outlook points to a moderate expansion of regional economies.

Banxico’s economist added, “We had a slowdown that we had been observing for several quarters, to which this environment of uncertainty is now compounded.” She said this could be due to lower internal and external demand, given that manufacturing production slowed in the United States (US).

Mexico’s central bank revealed an economic contraction of -0.6 % in Q4 2024. Although the country is not in a recession, having a negative quarter could be a prelude to a deeper economic slowdown.

Business executives interviewed by Banxico indicated that deteriorating public safety and trade policies implemented by the US are among the risks that could affect regional economies over the next year.

Also, public investment in infrastructure at the state and federal levels may be lower than expected.

She considered that, in the face of these challenges, it is necessary to continue strengthening domestic sources of growth and generating favorable conditions for investment, especially to continue promoting infrastructure construction.