GDP would have to rebound in the second half of the year for Mexico to grow by 1%, estimates Citi chief

The upward adjustment of growth forecasts for Mexico by international organizations such as the International Monetary Fund (IMF) signals that they expect to see a rebound in activity in the second half of the year, warned Citi chief economist Julio Ruiz.

The IMF must be seeing something for the Mexican economy, which is raising its growth forecast. But that doesn't mean private sector analysts' expectations should shift in that direction, he noted.

Interviewed by El Economista , he said that each international organization, analyst, and the government's economic team have their own estimation models, which include different assumptions. In the case of the market, which according to the Citi survey, anticipates a 0.5% GDP increase, which coincides with his own team's forecast, they are seeing the weakness in economic activity extending into the second half of the year.

" Quarterly GDP growth should be relatively higher than what we have. We at Citi are expecting 0.1%, and the IMF surely has higher forecasts. They may have their reasons, but that's the main difference," he explained.

In fact, he agreed to estimate that the economy would need to grow 1.4% in the third and fourth quarters to meet the IMF estimate.

He considered that given the prevailing uncertainty and the tariffs still being negotiated, it is difficult to foresee the levels of progress assumed by the Fund. "I don't see [the IMF's revised projection] as difficult or impossible, but they are not our assumptions."

Analysts expect contraction

According to Citi's most recent biweekly survey , only two of the 38 analysts surveyed anticipate a contraction in the Mexican economy this year. These analysts, Valores Mexicanos Casa de Bolsa (Valmex) and Scotiabank México, anticipate a 0.1% decline in GDP in 2025.

Julio Ruiz clarified that for GDP to be negative this year, there would have to be a significant deterioration in economic activity in the second half of the year. Something Citi is definitely not seeing.

He explained that in the first half of the year, the economy grew by an average of 0.4%; for it to be negative, it must have fallen significantly in the last two quarters or deteriorated, impacting the second half of the year.

2026 will be less uncertain

For next year, the market consensus gathered by Citi anticipates that the economy will register 1.3% growth, which is slightly lower than the 1.4% Citi estimates.

According to the interviewed expert, the downward revision to the market consensus for next year surprised him, given that "economic activity has performed less poorly than expected."

"In theory, 2026 should have less uncertainty, due to some issue with the USMCA agreement , which would result in less uncertainty at the margin. Therefore, I don't see a strong reason to revise the forecast."

But they are again below the IMF's expectations, which, according to the update, are at 1.5 percent, and the government's, which are at 2.3 percent.