Analysts Cut Growth Forecast for 2026, Citing Insecurity as Main Risk
Security issues have solidified as the main drag on economic activity, according to Banco de México’s expectations survey conducted among private sector specialists between December 3 and 8. In this survey, analysts lowered their growth estimate for next year to 1.15% from 1.37%, while also reporting a five-point increase in concern over public safety. In Banxico’s risk classification, governance-related factors accounted for 44% of responses, outpacing internal economic conditions (26%) and external factors (25%).
The uptick in crimes impacting supply chains—such as cargo theft, extortion, and vandalism along logistics corridors—is increasing operational costs through insurance, security escorts, route changes, and inventory losses. Business groups have warned that heightened conflict in strategic sections of the country’s central and northern regions is squeezing profit margins and complicating expansion decisions, particularly for manufacturers and distributors operating with lean inventories.
In its latest Quarterly Report, Banxico kept its 2026 growth projection unchanged at 1.1%, as monetary policy remains tight to cement disinflation. While overall inflation has receded from its peaks, pressures in the services sector persist, and the central bank has reiterated that any easing of its stance will be approached cautiously. High real interest rates, although anchoring price expectations, also restrain credit and consumption, which in recent years had been supported by wage hikes and historically high remittances.
On the external front, the trajectory of the U.S. economy will continue to be crucial for Mexico’s export sector and integrated manufacturing. The realignment of supply chains toward North America has sustained investment in industrial parks in the north and Bajío regions, but fully capitalizing on “nearshoring” will require addressing bottlenecks in electricity, water, permits, and the rule of law. Multiple industrial hubs continue to face low vacancy rates and rising rents, signaling strong demand but also capacity constraints.
On the fiscal side, the combination of greater spending needs and Pemex’s financial pressures narrows the government’s room to maneuver. After a significant fiscal boost, planned consolidation for next year could scale back public works and government consumption, with mixed effects: it bolsters macroeconomic sustainability but dampens aggregate demand. Coordination between public and private investment, especially in logistics and electricity infrastructure, will be key to supporting the relocation agenda.
Another point of attention is the scheduled 2026 review of the USMCA. Private sector economists agree that the timeline and degree of certainty in the negotiations will be decisive: if the process drags on past mid-2026, some investment could be put on hold, dampening growth below projections. Conversely, a swift and predictable negotiation—particularly on automotive rules of origin, dispute resolution, and energy issues—could unblock projects and accelerate capital flows.
Overall, the balance of risks for economic activity remains tilted to the downside due to insecurity and regulatory uncertainty, while supporting factors include integration with the United States, strong investment momentum from nearshoring, and a possible gradual easing of interest rates if disinflation takes hold. Exchange rate dynamics, logistics costs, and the availability of energy inputs are variables that companies and households will need to monitor.
In summary, the downgrade in expectations confirms that insecurity has become a key economic constraint. The growth path will depend on credible progress in security and rule of law, clarity over the USMCA review, and an orderly transition in monetary and fiscal policy. Without resolving these issues, the nearshoring potential is unlikely to fully translate into increased investment and productivity.
