Summary
Mexico’s economy contracted 0.6% in the first quarter compared with the previous three months, final figures released Friday by the national statistics institute show. The closing number improved on a preliminary -0.8% reading issued last month and was better than the -0.8% median estimate from analysts surveyed by Bloomberg.
Quarterly and annual readings
Measured on a year-ago basis, gross domestic product expanded 0.2%. Despite that modest annual gain, quarterly momentum was negative as activity across several key sectors eased during January-to-March.
Sector contributions
The data indicate that agriculture, manufacturing and services all weighed on output in the quarter. Those sectoral weaknesses combined to produce the overall contraction reported for Q1.
Historical context within the available data
The first-quarter decline represents the steepest quarterly drop recorded since the final quarter of 2024. That deterioration in sequential growth has heightened concern among observers that Mexico faces the risk of a technical recession - defined as two consecutive quarters of falling GDP - if weakness persists into the second quarter.
Monetary policy update
Earlier in the month, Banxico trimmed its policy rate by 25 basis points to 6.50%. The central bank said it had concluded a two-year easing cycle, signaling an end to the rate cuts that preceded the latest move.
Implications
The figures underline near-term fragility in Mexico’s growth profile. Weaker manufacturing and services are notable for their potential to affect employment, tradeable output and consumer-facing industries, while agricultural softness can influence rural incomes and related supply chains.
Data limitations
The release contains the final quarterly estimate and aligns with the scope of the national statistics institute’s reporting. Where the underlying sectoral data are limited in granularity within this release, the headline and the sectors named above reflect the institute’s summary of contributing factors.