He anticipates an economic contraction of 0.4% in 2025. The fall in investment, the pressure of American tariffs and global deceleration affect productive activity. In 2024, growth had already slowed to 1.5%, with a contraction in the last quarter.
The main risk focus comes from the relationship with the United States. Mexican exports to their main trading partner represent 27% of GDP, and the imposition of new tariffs – particularly the automotive sector – could further deteriorate the activity. The review of the T-MEC, scheduled for 2026, will mark a turning point, but uncertainty already slows the relocation of investments.
Pemex, debt and tight budget
Fitch observes a deterioration of public finances. The Financial Requirements of the Public Sector (RFSP) reached 5.7% of GDP in 2024, promoted by social spending, megaprojects and losses of Pemex. Although the government of Claudia Sheinbaum plans to reduce that 3.9% figure this year with cuts to capital spending, the agency warns that the fiscal margin remains narrow and that Pemex may require more support.
The general debt increased 50.9% of GDP in 2024 and could exceed 54% in 2025. Fitch attributes part of the increase to the gradual migration of Pemex’s obligations towards the sovereign balance.
Mexico plan and pending reform
The “Mexico Plan” raises a mixed formula of public companies with private participation. Fitch points out that the new energy legislation reinforces state control, although it incorporates collaboration schemes. However, the private sector still shows reservations, partly because of the reforms that weaken autonomous bodies and modify the Judiciary.
The agency recognizes the government’s fiscal effort, but doubts its sustainability. The administration has now ruled out a structural fiscal reform, although it does not exclude it whether consolidation is insufficient.
On the Monetary Front, Banxico lowered the reference rate to 9%, with space for new cuts if inflation is maintained under control. The Central Bank retains margins for a countercyclical response, although a new tariff shock could limit it.
Mexico has solid external shock absorbers such as reservations for 237,000 million dollars and access to the FMI flexible credit line for 36,000 million. The current account deficit closed at just 0.4% of GDP.
Fitch recognizes that the environment is complicated. A more aggressive tariff policy, combined with fiscal weakness and institutional tensions, could cause a downward review. However, collection improvements, investment recovery signs and a positive turn in commercial policy could strengthen the note.
