Mexico's economy faces downside risks in 2026: central bank

Alsharq Tribune-M.Essam 

Mexico faces several risks that could negatively impact its economic activity in 2026, including a possible deterioration in the current climate of uncertainty driven by potential changes in U.S. policies, the central bank of Mexico (Banxico) said Tuesday.

In its "Monetary Policy Program for 2026," Banxico said the Mexican economy is expected to grow by 1.1 percent in 2026 and 2 percent in 2027, supported by rising domestic consumption and continued growth in exports.

However, the bank warned of the existing uncertainty surrounding trade ties with the United States and the United States-Mexico-Canada Agreement on free trade, which is up for review.

Potential changes in U.S. policies could dampen external demand, consumption and investment in Mexico, in addition to the risk of a possible slower-than-expected growth in the U.S. economy, said the bank.

Other key downside risks identified by Banxico include potential episodes of financial market volatility and adverse weather events that could impact domestic economic activity.

Regarding inflation, Banxico noted that various domestic and global economic factors "will favor an environment of lower inflationary pressures," and could foster the efficient convergence of inflation toward its 3.0 percent target.

The bank added that its governing board will assess when to make further adjustments to the benchmark interest rate.

Mexico's headline inflation stood at 3.69 percent in 2025, remaining within Banxico's target range.