Banxico Raises Growth Forecast to 0.6% and Maintains Inflation Convergence for 2026
The Bank of Mexico has raised its GDP growth forecast for this year to 0.6%, up from the 0.1% projected in May, and revised its expectation for 2026 to 1.1%, above the previous 0.9%. In its Quarterly Report covering April to June, the central bank noted that economic activity performed better than expected, despite slack conditions within the economy and a less favorable external environment.
According to the central bank, domestic demand has remained resilient, supported by still solid consumption—driven by employment, remittances, and real wage increases—while private investment linked to supply chain relocation (nearshoring) continues to serve as a structural support, albeit with uneven progress across regions. In contrast, manufacturing tied to the United States has seen a more mixed performance, reflecting a less robust industrial cycle in that country.
On prices, Banxico kept its estimate that headline inflation will converge to 3% by the third quarter of 2026, in line with its long-term target. The bank highlighted upside risks related to persistent services inflation, possible episodes of currency depreciation, and cost adjustments, as well as downside risks stemming from more moderate activity and corrections in input prices. With this risk balance, the monetary policy stance will remain prudent and data-dependent, in what the market expects will be a gradual normalization process to preserve anchored expectations.
On the labor front, the institution forecasts that in 2025, between 40,000 and 200,000 formal jobs affiliated with the IMSS will be created, below the previous range of 110,000 to 290,000 positions. The report also incorporates an expectation of 1.3 to 1.5 million platform workers being registered, which would significantly increase the rolls, though this does not necessarily represent net new job creation. For 2026, formal job creation is expected to range from 260,000 to 460,000, just below the prior interval.
Banxico noted that the Mexican economy could continue to outperform conservative scenarios if the effects of changes in U.S. economic policy are delayed. However, a faster tightening of external financial conditions, new trade measures, or a sharper slowdown in the U.S. could lead to weaker export growth and increased currency volatility, with implications for the inflation trajectory.
Looking to the medium term, achieving the potential of nearshoring will require addressing bottlenecks in energy, water, and logistics infrastructure, as well as regulatory certainty to accelerate projects. Coordination between public and private investment will be crucial to expanding electricity and transportation capacity, particularly in the north and Bajío regions, while the south-southeast continues to benefit from public works but lags in productivity. The evolution of public finances, the needs of the energy sector, and business confidence will be key factors to monitor.
In summary, Banxico's upward revision acknowledges economic resilience but also a still fragile environment. With inflation expected to gradually reach the target by 2026 and a labor market showing mixed signals, the risk balance for growth remains evenly poised. The pace of disinflation, the dynamics of investment, and the performance of the U.S. economy will determine the direction of upcoming macroeconomic surprises.
Final observation: The adjustment of the GDP forecast to 0.6% offers some relief, but does not dispel the challenges ahead. Achieving inflation consolidation at 3% by 2026, advancing labor formalization—including the inclusion of platform workers—and the ability to capitalize on nearshoring amid an uncertain external environment will define the pace of the Mexican economy in the coming quarters.
