Mexico’s GDP ended 2025 with an upward revision, but it confirms a year of weak growth

The economy picked up at the end of 2025, though annual growth was modest and exposed the industry’s fragility.

Mexico’s economy finished 2025 with slightly better performance than initially expected, after INEGI revised upward the year-over-year change in Gross Domestic Product (GDP) for the fourth quarter. The revision raised growth from 1.6% to 1.8% year over year—an adjustment that improves the year-end print but does not change the main diagnosis: Mexico went through a period of low momentum, with cumulative growth of just 0.8% compared with 2024.

On a quarter-over-quarter basis and using seasonally adjusted figures, GDP rose 0.9% versus the third quarter, when activity had contracted by -0.1%. The data suggest a “technical rebound” toward year-end and less fragility in domestic demand than had been anticipated months earlier, against a backdrop of global slowdown and still-restrictive financial conditions.

Behind the stronger finish was a more solid December: the Global Indicator of Economic Activity (IGAE) posted 3.3% year-over-year growth that month, above market consensus. In seasonally adjusted terms, the gain was 2.4% year over year and 0.4% month over month—performance that helped explain why quarterly GDP ultimately was revised upward.

Even so, the full-year picture shows limited growth. The 2025 result came in among the weakest since the pandemic, reflecting that the economy lost traction as the post-reopening boost faded and private investment remained cautious, particularly in capital-intensive sectors.

On the supply side, tertiary activities—trade and services—grew 2.1% year over year in the fourth quarter, becoming the main support for overall performance. Primary activities rose 7.8%, consistent with a stronger contribution from agriculture and livestock. In contrast, secondary activities increased just 0.3%, underscoring industrial weakness, especially in manufacturing and mining—sectors sensitive to the external cycle and to investment.

This combination of resilient services and fragile industry aligns with what has been seen in other slowdowns: consumption and certain services tend to support activity in the short term, while investment and industrial output feel more acutely the higher cost of financing and uncertainty about future demand.

Industry, investment, and the challenge of turning “nearshoring” into sustained growth

The limited advance in secondary activities during 2025 reopens the debate over the main bottleneck to growth: productive investment and infrastructure. While Mexico has appeared prominently on supply-chain relocation (“nearshoring”) maps thanks to its manufacturing integration with North America, projects ultimately hinge on concrete factors such as the availability of energy, water, transportation, and regulatory certainty. Industry is typically the natural channel for converting these opportunities into real output, but the year-end data suggest that without enabling conditions, the boost may remain at the level of announcements or isolated impacts, without pulling the broader economy along.

On the domestic front, consumption has shown resilience in recent years, supported by the labor market and minimum-wage increases, though with regional and sectoral differences. Looking ahead, the pace of activity will depend on whether investment can regain ground and whether industry benefits from stronger external demand, particularly from the United States, as well as a gradual normalization of financial costs as inflation converges and monetary policy has room to ease.

For 2026, the balance of risks still points to moderate growth: on one hand, opportunities remain for deeper manufacturing integration and expansion in services; on the other, infrastructure gaps, volatility in the external environment, and the need to raise productivity continue to weigh. In this context, the revised fourth-quarter figures point to a less-weak finish than previously thought, but they also underscore that the structural challenge remains accelerating potential growth beyond short-term rebounds.

In short, the upward revision to GDP improves the tone of the end of 2025 and confirms an unexpected lift in December, though the 0.8% annual result keeps the picture one of relative stagnation: services and agriculture supported growth, while industry remained the most vulnerable link.