Mexican GDP with a weak contribution to that of the major economies of Latin America

The Mexican economy made a weak contribution to the average economic activity of the seven largest economies in Latin America (LA7) during the first quarter, according to an analysis by global bank Goldman Sachs.

The aforementioned economies of the AL7 are Argentina, Brazil, Colombia, Chile, Ecuador, Mexico and Peru.

Real growth in the selected group of countries reached an annual GDP growth of 0.8% between January and March of this year, they reported, which reflects a "meager performance" compared to the 0.2% annual growth observed in the last quarter of the previous year.

According to the analysis, led by the region's chief economist, Alberto Ramos, the strongest GDP growth in the LA7 was driven in the first quarter by the performance of Argentina, Brazil, and Colombia, as well as by "Mexico's transition from negative to slightly positive growth."

In the analysis titled "Tariffs, Trick or Treat," they examined each of the seven largest economies in the region. In Mexico's case, they noted that GDP had a "satisfactory start to the year," but they questioned whether it will be temporary or persistent.

“Despite increased internal and external uncertainty, Mexico narrowly avoided entering a technical recession in the first quarter of the year,” they commented.

They reported that Mexico experienced "modest growth" in the first quarter compared to the last quarter of 2024, assuming the 0.2 percent estimate of economic activity released by INEGI.

Weak composition in a challenging year

In their analysis, they made three observations regarding this quarterly growth: the composition of the estimated performance was weak, as it is based on the dynamism of the primary sector; the observed growth figure is a preliminary estimate that must be confirmed at the end of May, when the institute releases the final GDP figure; and the third observation is that, if the 0.2% figure is confirmed, it will be a "weak performance."

If the 0.2% growth is confirmed in the final GDP figure, the Mexican economy will achieve a 0.3% increase for the full year, they added. This expectation would incorporate an upward revision to the new forecast, which they recently placed at negative 0.5%.

In their analysis, the economists emphasized that 2025 has become "a challenging year for Mexico" given the United States' tariff changes, which have weakened investor and consumer confidence. They added that remittances will continue to show volatile performance, which, however, may end up positive but moderate compared to the performance observed in previous years.