By Ana Isabel Martinez
MEXICO CITY (Reuters) – Mexico maintains a target for gross domestic product growth of between 2% and 3% this year, the finance ministry said on Thursday, noting there were no signs of a “permanent weakening” that could push the country into a recession.
If U.S. President Donald Trump makes good on promises to slap a 25% tariff on imports from Mexico, it could create significant volatility and uncertainty for Latin America’s second-largest economy.
Deputy Finance Minister Edgar Amador Zamora, however, said the country was not heading into a recession and that the impacts of possible tariffs by its most important trading partner were still unclear.
Zamora said Mexico maintained its GDP growth target.
Between October and December last year, GDP shrank more than expected, down 0.6% compared with the previous three-month period, preliminary data from national statistics agency INEGI showed earlier on Thursday.
It was the first quarter-on-quarter contraction in more than three years. Another consecutive quarter with a contraction would push Mexico into a technical recession, something analysts have already warned could happen.
“The 0.6% fall in GDP in the last quarter of 2024 situates Mexico at the edge of recession,” Grupo Financiero BASE’s economic analysis director Gabriela Siller said on X. “Consumption, the component with greatest weight in GDP, shows a clear slowdown.”
Mexico ended last year with a fiscal deficit of 5.7% of GDP, 0.2 percentage point below what had previously been estimated, according to the finance ministry.
In December, Mexico’s public sector ran a fiscal deficit of 618.56 billion pesos ($30.28 billion), bringing a deficit of 1.66 trillion pesos through 2024.
Public debt stood at 17.43 trillion pesos, or 51.4% of GDP.
Revenues from hydrocarbons fell 15.1% in real terms last year following lower crude oil production, the numbers showed, to 2.8% of GDP. Mexico would continue to hedge these revenues, the finance ministry said.
($1 = 20.4258 Mexican pesos)
(Reporting by Ana Isabel Martinez; Additional reporting by Kylie Madry; Writing Stefanie Eschenbacher; Editing by Sarah Morland and Leslie Adler)
