MEXICO CITY (Reuters) – The International Monetary Fund (IMF) estimates Mexico’s economic growth will slow to about 1.5% this year before falling to just 1.3% in 2025, according to updated forecasts from an international lender released on Friday.
The IMF noted that sustainable and inclusive growth of Latin America’s second economy will require “a broad set of reforms.”
Economic expansion in Mexico is slowing due to “efficiency constraints and tight monetary policy,” the statement said.
The updated forecasts follow the approval of the IMF’s current two-year flexible credit agreement with Mexico worth about $35 billion.
Despite higher government spending, the IMF indicated that private sector consumption and investment were slowing, as was employment growth.
“(Economic) growth is expected to slow further in 2025, reflecting the withdrawal of fiscal stimulus and the slowdown in the US,” the statement said.
“Inflation pressures are easing and further monetary restrictions and slowing activity are expected to bring inflation down to Banxico’s 3 percent target by 2025.” – he added.
The IMF also predicts a significant increase in Mexico’s budget deficit this year and an increase in public sector gross debt to 58% of GDP by the end of the year.
