On Tuesday, Mexican President Claudia Sheinbaum publicly rejected the International Monetary Fund’s (IMF) recent prediction of a 0.3% contraction in Mexico’s economy in 2025.
During her regular morning press briefing, Sheinbaum stated that the government disagrees with the projection and questions the assumptions underlying it.
“We don’t know what it is based on, We do not agree,” Sheinbaum stated. “We have our economic models, which the finance ministry has, that do not coincide with this projection.”
Her comments came just hours after the IMF released its updated World Economic Outlook, which forecast a 0.3% economic contraction for 2025, down from the fund’s January forecast of a 1.4% expansion.
The updated forecast links the contraction mostly to the impact of newly imposed US tariffs on Mexican exports, a scenario that promises to weigh hard on Latin America’s second-largest economy.
Mexico is bringing down the growth outlook for the entire region
The IMF has cut its 2025 GDP growth forecast for Latin America and the Caribbean, citing Mexico’s weaker outlook as the primary factor behind the regional downgrade.
The organisation attributed Mexico’s reduced prospects to deteriorating external demand, particularly tied to US trade policy shifts, which risk disrupting regional supply chains and amplifying economic headwinds across neighbouring economies.
Much of the IMF’s lowered prediction is based on the chilling effect of US tariffs on Mexican exports, particularly in manufacturing sectors such as automobiles and electronics.
Analysts believe that due to Mexico’s tight interconnectedness with North American supply chains, even minor trade disruptions could have a significant impact on its GDP.
Unlike the pessimistic forecast from the IMF, Mexico’s finance ministry released a draft budget earlier this month forecasting growth of between 1.5% and 2.3% this year.
That estimate, termed “conservative” by officials, is still markedly more optimistic than the outlook by at least the Mexican central bank and most private analysts, who have started flagging stiffening headwinds.
Sheinbaum stands by domestic models
The Sheinbaum administration has consistently portrayed Mexico’s economic fundamentals as healthy, citing robust labour markets, stable inflation, and infrastructure investments linked to nearshoring trends.
The president highlighted that the government’s economic modelling is still the key direction for budgetary and monetary policy.
Despite Sheinbaum’s optimistic stance, the disparity between official estimates and those of multilateral organisations and market experts may prompt additional examination, especially as Mexico prepares for broader fiscal debates.
Peso climbs despite IMF’s grim outlook
According to Trading Economics, the Mexican peso rose to a near six-month high of 19.6 per US dollar, supported by the country’s 11% benchmark interest rate, which continues to draw carry-trade inflows.
This appreciation was further bolstered by a “very productive” call between Presidents Claudia Sheinbaum and Donald Trump, which alleviated concerns about probable additional tariffs on major Mexican exports such as steel, automobiles, and tomatoes.
The peso’s gain also mirrors broader US dollar weakness, as President Trump’s criticism of the Federal Reserve and proposals for immediate rate reduction have cast doubt on the Fed’s independence, reducing the dollar’s safe-haven attractiveness.
Meanwhile, Mexico’s consistent oil export profits continue to boost trade receipts, boosting investor confidence in the country’s economic strength.
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