Mexico intends to maintain a gross domestic product growth target of between 2% and 3% for this year, as announced by the finance ministry on Thursday. The ministry emphasized that there are no indications of a sustained economic decline that could lead to a recession.
The uncertainty surrounding U.S. President Donald Trump's proposed tariffs could trigger significant volatility for Latin America's second-largest economy.
Despite concerns, Deputy Finance Minister Edgar Amador Zamora affirmed that Mexico is not on track for a recession, although the potential impacts of tariffs from its main trading partner remain uncertain.
It was reported that Mexico sustained its GDP growth target, even though preliminary data from the national statistics agency INEGI showed a 0.6% contraction in GDP between October and December last year, marking the first quarterly decline in over three years. Analysts suggest that another quarter of contraction could result in a technical recession.
Gabriela Siller, economic analysis director at Grupo Financiero BASE, expressed concerns, stating, The 0.6% decline in GDP in the last quarter of 2024 places Mexico on the brink of recession.
The finance ministry disclosed that Mexico closed last year with a fiscal deficit of 5.7% of GDP, slightly lower than prior estimates. The public sector's fiscal deficit in December was 618.56 billion pesos ($30.28 billion), leading to a total deficit of 1.66 trillion pesos for 2024.
As of now, Mexico's public debt accounts for 17.43 trillion pesos, representing 51.4% of GDP. It was noted that revenues from hydrocarbons decreased by 15.1% in real terms last year due to reduced crude oil production, amounting to 2.8% of GDP. The finance ministry confirmed its intention to continue hedging these revenues.
(The exchange rate is $1 = 20.4258 Mexican pesos)