On Tuesday, Mexican president Claudia Sheinbaum publicly rebuffed the International Monetary Fund (IMF)’s recent prediction that Mexico’s economy would contract by 0.3% in 2025.
Sheinbaum said that the government does not agree with the projections and questions its assumptions.
Sheinbaum said, “We don’t agree. We don’t know the basis.” “We have economic models that the finance ministry has and they do not match this projection.”
Her comments came only hours after the IMF’s updated World Economic Outlook was released, which predicted a 0.3% contraction in the economy for 2025. This is down from the January forecast by the fund of a 1.4% growth.
The updated forecast attributes the contraction primarily to the impact of newly-imposed US tariffs on Mexican imports, a scenario which is likely to have a negative impact on Latin America’s largest economy.
Mexico is lowering the growth prospects for the entire region
The IMF has lowered its GDP growth forecasts for Latin America and Caribbean in 2025, citing Mexico as the primary reason behind the downgrade.
The organization attributed Mexico’s reduced outlook to deteriorating demand, especially tied to US trade policies, which could disrupt regional supply chains and amplify economic headwinds in neighbouring economies.
The IMF’s lower prediction is largely based on the effect of US tariffs in the manufacturing sector, such as automobiles and electronic products.
Analysts believe that because Mexico is tightly interconnected with North American supply chain, even minor disruptions in trade could have a significant effect on its GDP.
The Mexican finance ministry, in contrast to the pessimistic IMF forecast, released a draft of its budget earlier this month. It predicted a growth between 1.5% and 2,3% this year.
The estimate, which is deemed “conservative” in the official report, is still significantly more optimistic than the outlook of the Mexican central bank or most private analysts who have begun to flagging stronger headwinds.
Sheinbaum is a firm believer in domestic models
The Sheinbaum administration has consistently portrayed Mexico’s economic fundamentals in a positive light, citing stable inflation, robust labour markets and infrastructure investments tied to nearshoring trends.
The president emphasized that the economic modeling of the government is still the main direction for budgetary policy and monetary policy.
Sheinbaum may be optimistic, but the disparity between the official estimates and those of market experts and multilateral organisations could prompt further examination, particularly as Mexico prepares to engage in broader fiscal discussions.
Peso climbs despite IMF’s grim outlook
Trading Economics reports that the Mexican peso has reached a six-month high at 19.6 US dollars, supported by the 11% benchmark rate of the country, which continues attracting carry-trade inflows.
This appreciation was further bolstered after a “very fruitful” call between Donald Trump and Claudia Sheinbaum, which eased concerns over possible additional tariffs on important Mexican exports like steel, automobiles and tomatoes.
The dollar’s attractiveness as a safe-haven currency has also been reduced by President Trump’s criticisms of the Federal Reserve, and his proposals for an immediate rate cut.
Mexico’s consistent oil-export profits continue to boost the country’s trade receipts and increase investor confidence in its economic strength.
This post Mexico’s Sheinbaum defends Mexico’s growth prospects and rejects IMF pessimistic forecast may be modified based on new developments.
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