BBVA revised Mexico’s 2026 GDP growth forecast to 1.2%, converging with Banxico’s 1.1% projection and the IIF’s 0.9% estimate. Meanwhile, gross fixed investment posts 19 consecutive months of annual declines and domestic consumption weakens, even as more than 82% of Mexico’s exports enter the US tariff-free under USMCA. The USMCA midterm review on July 1 represents the primary near-term risk for manufacturers, auto parts exporters and nearshoring operators targeting a projected US$79 billion opportunity through 2030, as stricter rules of origin and higher content requirements could raise compliance costs across manufacturing.<\/p>\n
BBVA has revised its 2026 GDP growth forecast for Mexico downward to 1.2%, from a prior estimate of 1.8%, citing a slowdown in domestic investment and consumption even as the country’s trade position relative to the United States remains one of the strongest in the world.<\/p>\n
The revision, presented during the bank’s “Situaci\u00f3n M\u00e9xico” report, comes alongside a broader consensus of downward adjustments from major financial institutions and central banks.\u00a0Banxico cut its own 2026 forecast<\/a> to 1.1% from 1.6% following a 0.6% GDP contraction in 1Q26, while private sector analysts surveyed by Mexico’s central bank also converged at 1.1%, marking the third consecutive monthly downward revision. The Institute of International Finance projects growth of just 0.9%, and the OECD forecasts 1.3%. By contrast, President Claudia Sheinbaum’s administration has maintained a government forecast ranging from 1.8% to 2.8%.<\/p>\n Said\u00e9 Salazar, Principal Economist,\u00a0 BBVA Research Mexico, described the current economic dynamic as one of three distinct velocities. External demand from the United States for Mexican manufactured goods and industrial inputs has remained relatively resilient, providing a partial buffer for exports. Meanwhile, domestic demand has deteriorated, with gross fixed investment registering contraction and consumption growth slowing considerably.<\/p>\n “The underlying weakness of domestic demand is going to persist into the second half of the year,” Salazar noted. “We are observing a moderation in consumption and a significant contraction in gross fixed investment.”<\/p>\n The Center for Economic Studies of the Private Sector (CEESP) corroborated the trend, noting that investment has posted 19 consecutive months of annual declines. Gross fixed investment did register a marginal monthly gain of 0.4% in March 2026, its first positive reading after two consecutive monthly contractions, but remained in negative annual territory.<\/p>\n Despite the near-term weakness, Salazar pointed to a “gradual recovery” expected in 2027, driven by reduced commercial uncertainty and progress in mixed public-private contracts. She also identified strength in Mexico’s export sector tied to artificial intelligence-related investment as a potential upside factor.<\/p>\n USMCA Advantage Remains Intact<\/p>\n At the same event, BBVA\u2019s Chief Economist Carlos Serrano argued that Mexico’s position within the North American trade framework represents a structural competitive advantage that no other country currently holds. “According to our calculations,\u00a0Mexico is the most attractive country<\/a> in the world to produce and export to the United States, the largest market on the planet,” Serrano said.<\/p>\n His assessment rests on the tariff dynamics that emerged from the US trade policy shifts of recent years. In April 2025, the United States imposed broad tariffs on imports from all countries. Goods already covered under the USMCA, however, were largely exempted, with the notable exceptions of automobiles, steel, and aluminum. More than 82% of Mexico’s exports to the United States entered without tariffs as a result of that framework.<\/p>\n Serrano also cited a significant moment in April 2026, when the US Supreme Court declared prior Trump administration tariffs illegal. In the same declaration that reinstated a 10% universal tariff on all countries, USMCA-compliant goods were again exempted. “That same afternoon, the same declaration determined that everything entering under USMCA is exempt, which shows it is not an accident,” he said. “We have now had more than a year of favorable treatment for USMCA.”<\/p>\n That advantage has had measurable effects. The share of Mexican exports utilizing USMCA preferences reportedly jumped from 44.8% to 88.7% in 2025, as companies restructured supply chains to qualify for preferential market access. Mexico has remained the United States’ largest trading partner since overtaking China in 2023, and bilateral trade between the two countries could approach US$900 billion in 2026, according to Wall Street Journal estimates.<\/p>\n USMCA Review Looms as Key Risk<\/p>\n