{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Mexico",
  "publication": "IMF News, October 27, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/10/27/pr-25350-mexico-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "On October 23, the Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Mexico. The authorities have consented to the publication of the Staff Report prepared for this consultation.",
  "publishDate": "2025-10-27",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Executive Board completed the Article IV Consultation for Mexico on October 23.\n- Authorities consented to the publication of the Staff Report prepared for this consultation.\n- Press Release No. 25/350; published October 27, 2025."
    },
    {
      "heading": "Growth and Inflation",
      "content": "- Economic activity remains soft.\n- Projected real GDP growth:\n  - 2024: 1.4 percent\n  - 2025: 1.0 percent\n  - 2026: 1.5 percent\n- After expanding by 1.5 percent in 2024 (text reference), growth is constrained in 2025 by needed fiscal consolidation, restrictive monetary policy, and trade uncertainty dampening consumption and investment.\n- Activity expected to pick up to 1.5 percent in 2026 as domestic policies ease, though tariffs and trade uncertainty will continue to constrain growth.\n- Inflation trajectory:\n  - Consumer prices, end of period:\n    - 2024: 4.2 percent\n    - 2025: 3.7 percent\n    - 2026: 3.0 percent\n  - Consumer prices, period average:\n    - 2024: 4.7 percent\n    - 2025: 3.9 percent\n    - 2026: 3.3 percent\n- Headline inflation is moderating and expected to converge to Banxico’s 3-percent target in the second half of 2026.\n- Recent appreciation of the peso and normalizing food prices expected to support convergence."
    },
    {
      "heading": "Fiscal Outlook and Public Debt",
      "content": "- Fiscal stance:\n  - The fiscal expansion of 2024 is expected to be reversed in 2025.\n  - Authorities’ fiscal targets for 2026-30 entail additional deficit reduction, but debt-to-GDP would rise steadily over the medium term.\n- Key fiscal figures:\n  - Revenue and grants (% GDP):\n    - 2024: 24.6\n    - 2025: 24.2\n  - Expenditure (% GDP):\n    - 2024: 30.3\n    - 2025: 28.5\n    - 2026: 28.3\n  - Overall fiscal balance (% GDP):\n    - 2024: -5.7\n    - 2025: -4.3\n    - 2026: -4.1\n  - Gross public sector debt (% GDP):\n    - 2024: 58.3\n    - 2025: 58.9\n    - 2026: 59.9\n- Recommendation: More ambitious and front-loaded fiscal consolidation, with policy measures to support it, is needed to prevent further upward drifts in public debt and create fiscal space to respond to possible shocks.\n- Directors’ emphasis:\n  - Consider mobilizing tax revenues through improvements in tax administration and tax policy changes.\n  - Protect social spending and growth-enhancing public investment.\n  - Strengthen financial health and profitability of state-owned enterprises, especially Pemex.\n  - Strengthen the medium-term fiscal framework to enhance credibility."
    },
    {
      "heading": "Monetary Policy and Financial Sector",
      "content": "- Banxico actions:\n  - Has cut interest rates by 375 basis points since early-2024, in tandem with the decline in inflation.\n  - Monetary policy remains moderately contractionary.\n- Policy guidance:\n  - Monetary easing should continue once it becomes clearer that inflation is on a path to the 3 percent target.\n  - Directors agreed further monetary easing should follow clear signs that inflation is on a sustained path to the target.\n  - Directors suggested further refinements to Banxico’s communication toolkit to strengthen monetary policy transmission and better anchor inflation expectations, while safeguarding flexibility and maintaining credibility.\n  - Maintaining a flexible exchange rate is critical to absorb shocks.\n- Financial sector:\n  - Financial system remains sound and resilient to shocks, amid effective financial supervision.\n  - Directors highlighted strong capital and liquidity positions.\n  - Encouraged continued implementation of recommendations from the 2022 Financial Sector Assessment Program.\n  - Emphasized financial inclusion and expanding credit should focus on addressing market failures and promoting competition.\n  - While acknowledging progress in AML/CFT framework, Directors stressed need to further strengthen interagency coordination and risk-based supervision to combat financial crimes and money laundering."
    },
    {
      "heading": "External Sector and External Buffers",
      "content": "- Mexico maintains adequate external buffers and an external position in line with fundamentals.\n- Near-term strengthening of the current account—due to weak domestic demand—is expected to unwind going forward.\n- Expected patterns:\n  - Mild deterioration of the trade balance.\n  - Gradual decline in remittances.\n- Key external figures:\n  - Current account balance (% GDP):\n    - 2024: -0.9\n    - 2025: -0.2\n    - 2026: -0.3\n  - Foreign direct investment (% GDP):\n    - 2024: 1.7\n    - 2025: 1.1\n  - Gross international reserves (US$ billions):\n    - 2024: 232.1\n    - 2025: 249.7\n    - 2026: 259.0\n  - In months of next year's imports of goods and services:\n    - 2024: 4.1\n  - Total external debt (% GDP):\n    - 2024: 24.5\n    - 2025: 25.6\n    - 2026: 24.8\n  - REER (% change):\n    - 2024: 0.2"
    },
    {
      "heading": "Structural and Supply-Side Issues",
      "content": "- Mexico’s potential growth hinges on:\n  - Closing infrastructure gaps.\n  - Strengthening the rule of law.\n  - Deepening integration with global trading partners.\n- Directors underscored that unlocking stronger growth requires addressing long-standing supply-side constraints:\n  - Improve the business climate.\n  - Strengthen judicial independence.\n  - Tackle corruption and crime.\n  - Maintain open trade as an engine of growth.\n  - Policy support for strategic sectors should be narrowly targeted to address market failures and avoid introducing barriers to trade and investment."
    },
    {
      "heading": "Executive Board Assessment and Policy Recommendations",
      "content": "- Directors highlighted Mexico’s strong fundamentals and track record of very strong policies and policy frameworks as instrumental to economic resilience.\n- Key recommendations and views from Directors:\n  - Maintain sound macroeconomic policies while advancing supply-side reforms to bolster potential growth.\n  - Consider a more ambitious fiscal consolidation to prevent further upward drifts in public debt and create fiscal space for future shocks; some Directors favored a more gradual path to stabilize debt while preserving growth momentum.\n  - Focus consolidation on mobilizing tax revenues, protecting social spending, and growth-enhancing public investment.\n  - Strengthen state-owned enterprises’ financial health, especially Pemex.\n  - Continue monetary policy easing only when inflation shows sustained convergence to target; consider refinements to Banxico’s communication toolkit.\n  - Maintain flexible exchange rate.\n  - Continue financial sector reforms and AML/CFT improvements, with stronger interagency coordination and risk-based supervision.\n  - Promote financial inclusion and competition to expand credit."
    },
    {
      "heading": "Key Country Indicators (selected)",
      "content": "- Population (millions, 2024): 132.3\n- GDP per capita (U.S. dollars, 2024): 14,034\n- Quota (SDR, millions): 8,912.7\n- Poverty headcount ratio (% of population, 2024): 29.6\n- Main export products: cars and car parts, electronics, crude oil\n- Main import products: cars and car parts, electronics, refined petroleum\n- Key export markets: United States, EU and Canada\n- Key import markets: United States, China, EU\n- Employment — Unemployment rate, period average (%):\n  - 2024: 2.7\n  - 2025: 2.9\n  - 2026: 3.1\n- Monetary and credit:\n  - Broad money (% change):\n    - 2024: 13.8\n    - 2025: 5.5\n    - 2026: 5.8\n  - Credit to non-financial private sector (% change):\n    - 2024: 11.3\n    - 2025: 4.0\n    - 2026: 5.0\n  - 1-month Treasury bill yield (in percent):\n    - 2024: 10.7\n\nSource: IMF Executive Board press release — IMF Executive Board Concludes 2025 Article IV Consultation with Mexico (Press Release No. 25/350, October 27, 2025).\n\n---\n\n\n References\n\n- Mexico and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- www.imf.org/Mexico\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/10/27/pr-25350-mexico-imf-executive-board-concludes-2025-article-iv-consultation"
    }
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    "Published: October 27, 2025",
    "Executive Board completed the Article IV Consultation for Mexico on October 23.",
    "Authorities consented to the publication of the Staff Report prepared for this consultation.",
    "Press Release No. 25/350; published October 27, 2025.",
    "Economic activity remains soft.",
    "Projected real GDP growth:",
    "After expanding by 1.5 percent in 2024 (text reference), growth is constrained in 2025 by needed fiscal consolidation, restrictive monetary policy, and trade uncertainty dampening consumption and investment.",
    "Activity expected to pick up to 1.5 percent in 2026 as domestic policies ease, though tariffs and trade uncertainty will continue to constrain growth.",
    "Inflation trajectory:",
    "Headline inflation is moderating and expected to converge to Banxico’s 3-percent target in the second half of 2026.",
    "Recent appreciation of the peso and normalizing food prices expected to support convergence.",
    "Fiscal stance:",
    "Key fiscal figures:",
    "Recommendation: More ambitious and front-loaded fiscal consolidation, with policy measures to support it, is needed to prevent further upward drifts in public debt and create fiscal space to respond to possible shocks.",
    "Directors’ emphasis:",
    "Banxico actions:",
    "Policy guidance:",
    "Financial sector:",
    "Mexico maintains adequate external buffers and an external position in line with fundamentals.",
    "Near-term strengthening of the current account—due to weak domestic demand—is expected to unwind going forward.",
    "Expected patterns:",
    "Key external figures:",
    "Mexico’s potential growth hinges on:",
    "Directors underscored that unlocking stronger growth requires addressing long-standing supply-side constraints:",
    "Directors highlighted Mexico’s strong fundamentals and track record of very strong policies and policy frameworks as instrumental to economic resilience.",
    "Key recommendations and views from Directors:",
    "Population (millions, 2024): 132.3",
    "GDP per capita (U.S. dollars, 2024): 14,034",
    "Quota (SDR, millions): 8,912.7",
    "Poverty headcount ratio (% of population, 2024): 29.6",
    "Main export products: cars and car parts, electronics, crude oil",
    "Main import products: cars and car parts, electronics, refined petroleum",
    "Key export markets: United States, EU and Canada",
    "Key import markets: United States, China, EU",
    "Employment — Unemployment rate, period average (%):",
    "Monetary and credit:",
    "[Mexico and the IMF](http://www.imf.org/external/country/MEX/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[www.imf.org/Mexico](https://www.imf.org/en/Countries/MEX)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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