GDP Will Be 1.5% for 2024: Banxico

The Bank of Mexico (Banxico) has lowered its economic growth estimate for the country in 2024 from 2.4% to 1.5%, due to the marked weakness and the slowdown in the U.S. manufacturing sector, the country’s main trading partner.

This is the third consecutive downward revision of the Central Bank’s Gross Domestic Product (GDP) forecast for this year, after lowering it from 3% to 2.8% in February, and from 2.8% to 2.4% in May.

Additionally, the estimate fell below the 1.7% average rate predicted in the recent Citibanamex Expectations Survey, which included responses from 35 financial institutions.

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For 2025, the Central Bank also reduced its estimate, forecasting that GDP will stand at 1.2%, down from the 1.5% estimated in the first quarter's quarterly report.

Victoria Rodríguez Ceja, Governor of Banxico, noted that "we are making an important revision" due to the "noticeable weakness" that economic activity has shown since the fourth quarter of last year.

She explained that this is due to the sluggishness observed in the manufacturing sector, which is linked to unfavorable performance that has, in turn, been observed in U.S. economic activity.

Another factor contributing to this revision is the construction sector, which is also experiencing a significant slowdown due to reduced momentum in public infrastructure projects.

She added that the loss of dynamism in services in recent quarters is related to the overall weakness seen in the industrial sector, as well as weakening consumption data and lower investment.