Mexico growth worries rise

Mexico’s 2026 growth outlook is dimming as economists warn that investment has stalled even after Mexico posted a record year for foreign direct investment. (cronista.com) In Citi’s Mexico Expectations Survey published on February 4, 2026, the median forecast for Mexico’s gross domestic product growth in 2026 was 1.4%, up from 1.3% in the prior survey but still low by emerging-market standards. Respondents’ estimates ranged from 0.6% to 1.8%. (citigroup.com) At an ITAM economics seminar reported by El Cronista on January 12, 2026, Citi Latin America chief economist Ernesto Revilla said Mexico would grow about 1% in 2026 and said a “deep recession” in investment had held back activity the year before. He said public investment was beginning to normalize, while Bank of America’s Carlos Capistrán put 2026 growth closer to 1.2%. (cronista.com) Mexico’s central bank has been similarly cautious. Banco de México’s published forecast shows 2026 growth at 1.1%, with a range of 0.3% to 1.9%, after 1.4% growth in 2024 and a much weaker 2025. (banxico.org.mx) The tension in the story is that headline investment numbers and day-to-day business sentiment are pointing in different directions. Mexico’s Economy Ministry reported record foreign direct investment of $40.87 billion in 2025, up 10.8% from 2024. (mexiconewsdaily.com) But that inflow was still dominated by companies already in Mexico. Reinvestment of profits made up nearly 68% of 2025 foreign direct investment, while new investments accounted for 18%, even after rising to $7.38 billion. (mexiconewsdaily.com) That matters for nearshoring, the shift by manufacturers to move production closer to the United States. The U.S. State Department says Mexico remains a major investment destination because of its access to the U.S. market, but investors continue to cite unreliable energy supply, insecurity, corruption and regulatory uncertainty as core concerns. (state.gov) The Organisation for Economic Co-operation and Development said in its 2026 Mexico survey that growth had already moderated in 2025 amid global uncertainty and changes in U.S. trade policy. The group said stronger growth would require credible deficit reduction, more productivity-enhancing investment and stronger action against crime. (oecd.org) Revilla and Capistrán also tied the weak outlook to domestic and external politics. El Cronista reported that Revilla flagged institutional deterioration linked to reforms backed by President Claudia Sheinbaum, while Capistrán said a hard fiscal adjustment in 2025 was also constraining the economy. (cronista.com) The International Monetary Fund was somewhat less pessimistic in its April 14, 2026 World Economic Outlook, which put Mexico’s 2026 growth at 1.6% as global trade tensions and a new Middle East war clouded the broader outlook. Even that forecast still points to a slow recovery rather than a rebound. (imf.org) Mexico still has the geography, factory base and trade access that made it a nearshoring favorite in the first place. The question hanging over 2026 is whether those advantages can overcome frozen projects, weak public investment and the governance worries that economists say are now showing up in growth forecasts. (state.gov)