U.S. Policy Uncertainty Threatens Mexico's Economy

(MENAFN) Mexico confronts multiple threats that could undermine economic performance throughout 2026, particularly a potential worsening of uncertainty stemming from prospective shifts in U.S. policy direction, the nation's central bank warned Tuesday.

Banxico, Mexico's central bank, projected in its "Monetary Policy Program for 2026" that the Mexican economy will expand 1.1 percent in 2026 and 2 percent in 2027, buoyed by increased domestic consumer spending and sustained export sector momentum.

The institution cautioned, however, about prevailing ambiguity surrounding commercial relations with the United States and the United States-Mexico-Canada Agreement on free trade, which faces scheduled review.

Prospective U.S. policy modifications could suppress external demand, household consumption, and capital investment in Mexico, compounded by dangers of weaker-than-anticipated growth in the U.S. economy, the bank stated.

Additional critical downside threats identified by Banxico encompass possible episodes of financial market turbulence and damaging weather phenomena that might disrupt domestic economic operations.

Concerning price pressures, Banxico observed that various domestic and international economic dynamics "will favor an environment of lower inflationary pressures," potentially enabling efficient convergence of inflation toward its 3.0 percent target.

The institution added its governing board will evaluate timing for subsequent benchmark interest rate modifications.

Mexico's headline inflation registered 3.69 percent in 2025, staying within Banxico's target corridor.

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