## Mexico: Staff Concluding Statement of the 2026 Article IV Mission

_IMF News, October 2, 2026_

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**Canonical URL:** [Mexico: Staff Concluding Statement of the 2026 Article IV Mission](https://www.imf.org/en/news/articles/2026/10/02/cs-mexico-staff-concluding-statement-of-the-2026-article-iv-mission)

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## Bibliographic details
- Published: October 2, 2026

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### Key Messages
- Growth is projected to reach 1.5 percent in 2026 and 1.8 percent in 2027, remaining constrained mainly by external uncertainty.
- The disinflation process has continued; headline inflation is near target, though some underlying price pressures persist.
- Fiscal consolidation continued in 2026 and is expected to proceed gradually, but greater efforts are needed to put debt on a declining trajectory.
- Monetary policy should maintain a moderately tight stance to lock in disinflation until there is clear evidence of durable convergence to target.
- Financial system is sound, but efforts should continue to improve AML/CFT frameworks and deepen intermediation to support growth and inclusion.
- Raising potential growth requires boosting private investment by closing infrastructure gaps, reducing regulatory burdens and uncertainty, and strengthening trade integration, alongside sustained reforms to improve security, combat corruption, and lower informality.

### Macroeconomic Outlook
- After a weak 2025, growth is expected to gain strength in 2026 due to less restrictive fiscal and monetary policies, accelerating exports to the U.S., and limited impact of the global energy price shock.
- Projections:
  - GDP growth: 1.5 percent in 2026; 1.8 percent in 2027.
  - Headline consumer prices (end-of-period): 3.6 percent in 2026; 3.3 percent in 2027.
  - Core consumer prices (end-of-period): 3.7 percent in 2026; 3.3 percent in 2027.
- Inflation outlook: headline inflation near target but persistent core pressures and somewhat elevated inflation expectations likely delay a durable return to Banxico’s 3 percent target to early-2028.
- External sector: current account deficit projected to narrow in 2026 on strong exports to the U.S., then widen over the medium term as domestic demand recovers.
- Risks to activity:
  - Downside: heightened trade and geopolitical tensions, higher global interest rates, delays in consolidating public finances.
  - Upside: stronger-than-anticipated public investment, stronger U.S. demand, more rapid resolution of tariff-related uncertainties.
- Inflation risks remain tilted to the upside from persistent core inflation, elevated expectations, intensified geopolitical tensions, El Niño effects, and active income policies.

### Fiscal Policy
- Progress and concerns:
  - Consolidation continued in 2026 following a sizable deficit reduction in 2025, but the draft 2027 budget entails more gradual consolidation and an upward debt trajectory.
  - Recommendation: consider a more ambitious and front-loaded consolidation to place debt on a declining path and rebuild policy space.
- Credibility measures:
  - Early identification of measures would strengthen credibility.
  - A balanced set of measures should safeguard medium-term fiscal objectives while creating space for priority infrastructure and health spending.
- Revenue and expenditure options:
  - Expenditure: better targeting social programs; gradual phasing out of fuel subsidies; durably strengthening Pemex’s finances.
  - Revenue mobilization options: increasing subnational property and vehicle taxation; phasing out border tax incentives; raising and broadening the carbon tax; reforming the personal income tax; promoting formalization.
- Infrastructure investment:
  - Plans to boost infrastructure are welcome but need safeguards to ensure investments are growth-enhancing and consistent with absorptive capacity and medium-term fiscal sustainability.
  - Specific safeguards recommended: limit deferred expenditure recognition; limit accumulation of contingent liabilities from mixed projects; better align safeguards under the new investment framework with the Public Private Partnership law.
- Fiscal framework strengthening:
  - Recent elimination of the balanced budget rule and narrowing of structural spending rule coverage increase the need to strengthen the framework, which now relies primarily on the ‘net indebtedness’ rule.
  - Considerations: (i) introduce a medium-term debt anchor, correction mechanisms and binding escape clauses; (ii) create an independent fiscal council; (iii) implement stronger compliance mechanisms; (iv) compile and publish fiscal statistics in line with the Government Finance Statistics Manual.

### Monetary Policy
- Policy stance:
  - Maintain a moderately tight stance until underlying price pressures and inflation expectations show clear signs of receding.
  - Further tightening may be needed if disinflation stalls or renewed energy and food price shocks risk broader price increases.
- Liquidity management:
  - Extension of Banxico’s liquidity management facility to include outright bond purchases alongside sales should continue to be confined to short-duration government securities to prevent price distortions in longer-term government bonds and mitigate balance sheet risks.
- Communication:
  - Banxico should provide greater clarity on the policy objective and reaction function by emphasizing commitment to the 3 percent inflation target, clarifying that the variability range is not a tolerance range, and describing the roles of inflation expectations and economic slack in policy decisions.
- Exchange rate:
  - Maintain exchange rate flexibility; the exchange rate should continue to serve as a shock absorber.
  - Limit FX intervention to episodes of market liquidity disruptions or clear disorderly market conditions.

### Financial Sector Policies
- System soundness:
  - Banks hold strong capital and liquidity buffers, supported by low nonperforming loans, adequate provisioning, and solid profitability.
  - Stress tests indicate banks can withstand major shocks, including a sharp slowdown in U.S. demand and a repricing of sovereign bonds.
  - Corporate and household leverage remain low; currency mismatches are limited; no signs of stretched asset valuations.
- Monitoring priorities:
  - Sovereign-bank nexus warrants continued monitoring amid recent sovereign rating changes, rising global interest rates, and expected expansion of state-backed financing vehicles for infrastructure.
- FSAP implementation:
  - Publication of a macroprudential strategy in early 2026 is an important step.
  - Complementary actions: define activation thresholds for key tools (countercyclical capital buffer, borrower-based measures); strengthen inter-agency coordination; enhance consolidated and risk-based supervision; ensure adequate resources and legal protections for supervisors.
  - Address evolving risks including climate and AI-related threats; continued cyber-risk exercises are welcome.
  - A new FSAP is expected to be completed in 2027.
- Financial deepening and inclusion:
  - Entry of new digital banks and expansion of non-bank digital entities is widening access and competition.
  - Further gains: strengthen open finance, increase interoperability, improve collateral registries, and make insolvency and collateral recovery frameworks more effective.
  - Rapid growth of AFORES pension assets offers opportunities to finance investment and deepen capital markets but requires careful calibration of investment limits, glide paths, and risk safeguards.
  - Public financial institutions should focus on underserved market segments while maintaining strong governance and prudential standards.
- AML/CFT:
  - Effective implementation of the AML/CFT framework is necessary given high exposure to illicit financial flows from a large informal economy, widespread cash use, and transnational organized crime.
  - Recent reforms include the new AML/CFT Law and Digital Economy Law; priorities focus on effective implementation and the ongoing FATF mutual evaluation (expected to be completed by end-2026).

### Structural Reforms
- Private investment and trade:
  - Preserve gains from trade and unlock private investment; the USMCA review should safeguard a predictable, rules-based regional framework.
  - Recent measures to simplify investment processes and expand private participation in infrastructure, including electricity generation, are welcome but require greater regulatory and judicial predictability to scale up investment.
  - Industrial policies should address market failures, be temporary, cost-effective, and supported by proper governance.
- Labor, productivity, and public services:
  - Calibrate labor market policies, including minimum wage setting, with consideration for competitiveness and informality.
  - Broader reforms to reduce firms’ administrative burden, expand childcare, strengthen education, and improve security would raise productivity and support durable income growth.
- Governance and rule of law:
  - Strengthening governance is essential to support investment and growth.
  - Priorities: strengthen risk-based verification of officials’ asset declarations; advance whistleblower protection legislation; strengthen access-to-information oversight; prioritize professionalism, independence, and accountability in judicial reform.
- Energy and climate:
  - Expand renewable energy to strengthen energy security and support climate goals.
  - Mexico’s electricity mix remains heavily dependent on imported natural gas; renewables account for a relatively small share despite ample potential.
  - Authorities’ higher renewable electricity target for 2030 and policies to encourage private participation are welcome.
  - Additional measures: avoid prolonged fuel excise reductions; establish an effective carbon price under the new ETS; strengthen carbon taxation to help meet climate commitments.

### Key Statistical Highlights (selected figures from IMF staff estimates and projections)
- GDP growth (annual percentage change): 3.7 (2022); 3.1 (2023); 1.5 (2024); 0.5 (2025); 1.5 (2026); 1.8 (2027).
- Consumption (annual percentage change): 4.4 (2022); 3.9 (2023); 3.0 (2024); 1.1 (2025); 1.2 (2026); 1.8 (2027).
- Investment (annual percentage change): 7.3 (2022); 12.7 (2023); 4.4 (2024); -6.3 (2025); 0.3 (2026); 4.0 (2027).
- Exports of goods and services (annual percentage change): 9.5 (2022); -7.1 (2023); 3.5 (2024); 6.9 (2025); 8.6 (2026); 4.7 (2027).
- Imports of goods and services (annual percentage change): 8.6 (2022); 4.8 (2023); 3.8 (2024); 3.7 (2025); 10.6 (2026); 4.7 (2027).
- External current account balance (percent of GDP): -1.0 (2022); -0.6 (2023); -0.9 (2024); -0.5 (2025); -0.3 (2026); -0.5 (2027).
- Gross international reserves (billions of U.S. dollars): 201.1 (2022); 214.4 (2023); 232.1 (2024); 256.2 (2025); 265.7 (2026); 276.7 (2027).
- Consumer prices (end-of-period): 7.8 (2022); 4.7 (2023); 4.2 (2024); 3.7 (2025); 3.6 (2026); 3.3 (2027).
- Core consumer prices (end-of-period): 8.3 (2022); 5.1 (2023); 3.7 (2024); 4.3 (2025); 3.7 (2026); 3.3 (2027).
- General government revenue (percent of GDP): 24.2 (2022); 24.3 (2023); 24.9 (2024); 25.0 (2025); 24.9 (2026); 25.0 (2027).
- General government expenditure (percent of GDP): 28.5 (2022); 28.6 (2023); 30.7 (2024); 29.8 (2025); 29.1 (2026); 28.8 (2027).
- Overall fiscal balance (percent of GDP): -4.3 (2022); -4.3 (2023); -5.8 (2024); -4.9 (2025); -4.2 (2026); -3.9 (2027).
- Gross public sector debt (percent of GDP): 53.8 (2022); 52.7 (2023); 59.0 (2024); 61.7 (2025); 62.1 (2026); 62.9 (2027).
- GDP per capita (U.S. dollars, 2025): 13,759.
- Population (millions, 2025): 130.9.
- Life expectancy at birth (years, 2024): 75.5.
- Infant mortality rate (per thousand, 2024): 13.7.
- Poverty headcount ratio (% of population, 2024): 29.6.
- Adult literacy rate (2024): 95.9.
- Nominal GDP (billions of pesos): 29,526 (2022); 31,871 (2023); 33,583 (2024); 35,302 (2025); 37,475 (2026); 39,803 (2027).
- Output gap (percent of potential GDP): 0.0 (2022); 1.0 (2023); 0.4 (2024); -0.6 (2025); -0.6 (2026); -0.4 (2027).
- Financial system credit to non-financial private sector (annual percentage change): 10.9 (2022); 8.7 (2023); 11.3 (2024); 6.8 (2025); 6.2 (2026); 6.2 (2027).
- Broad money (annual percentage change): 7.3 (2022); 11.0 (2023); 13.8 (2024); 8.8 (2025); 6.2 (2026); 6.2 (2027).

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## References

- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)

_Source: https://www.imf.org/en/news/articles/2026/10/02/cs-mexico-staff-concluding-statement-of-the-2026-article-iv-mission_