Just in: The Mexican central bank lowers its growth forecast for 2024 to 2.8%.

The Bank of Mexico (Banxico) has downwardly adjusted its growth forecast for 2024, the last year of President Andrés Manuel López Obrador’s administration, and maintained its GDP expansion estimate for 2025, the first year of the new government.

In its Quarterly Report for October-December, the central bank indicated that its point estimate for the 2024 GDP forecast was revised from 3% to 2.8%. Therefore, the range for the expected GDP growth for the year is adjusted to between 2.2% and 3.4%.

Banxico stated that the adjustment in the economic growth forecast does not imply a “significant” modification but responds to lower growth in the final quarter of 2023 compared to expectations. This induces an arithmetic effect of a lower growth base for 2024.

For 2025, Banxico noted that the expected fiscal consolidation effort is anticipated to result in reduced domestic spending. Instead, it is expected that external demand will play a more significant role due to the better anticipated performance of the U.S. economy in that year relative to the previous one.

Consequently, the central estimate for GDP expansion in 2025 is 1.5%, the same rate as in the previous report. The range for the expected GDP growth in that year is between 0.7% and 2.3%.