Mexico's Economy Stagnates Amid Low Growth and Credit Rating Downgrades

Deputy Rubén Moreira Valdez (PRI) has asked Economy Secretary Marcelo Ebrard to explain a sharp slowdown in Mexico's economy. Official data show a 0.4 % annual GDP growth and a 0.6 % quarterly contraction in the first quarter of 2026, with key sectors such as industry, manufacturing and construction losing momentum.

Moody’s and Standard & Poor’s have cut Mexico’s sovereign credit rating to the lowest tier of investment‑grade, raising financing costs for the government and lowering the country’s appeal to private investors. The downgrade follows the United States’ decision not to renew the T‑MEC trade pact early, shifting the agreement to annual reviews and increasing commercial uncertainty.

The federal government highlighted twelve “strength” indicators, including a top‑10 global ranking for foreign direct investment (FDI). However, supplementary data reveal that 67.7 % of FDI was reinvested earnings, only 18 % represented new capital, GDP grew just 0.8 % in 2025—the weakest pace since the pandemic—and unemployment sits at 2.7 % with informal employment affecting 55.2 % of workers. Banxico lowered its growth outlook for 2024 to 1.1 %, and the central bank kept the policy rate at 6.50 %. Analysts warn that without clearer policy responses, Mexico could face three consecutive years of sub‑potential growth.