Goldman Sachs Revises Mexico's GDP Outlook Upward, Citing U.S. Trade Deals and Strong Q1 Growth

Goldman Sachs Revises Mexico's GDP Outlook Upward, Citing Stronger U.S. Growth and Trade Developments

Goldman Sachs has revised its 2025 GDP growth forecast for Mexico, now expecting flat growth instead of the previously predicted 0.5% decline. This revision is largely driven by stronger-than-anticipated economic growth in the U.S., which remains Mexico's largest trading partner, along with a better-than-expected 0.2% growth in Mexico’s first-quarter GDP.

The bank's revised outlook reflects optimism regarding the strength of the U.S. economy, which is expected to support demand for Mexican exports. However, despite these positive developments, Goldman Sachs remains cautious about the broader economic environment. There is still significant uncertainty surrounding U.S. tariffs on Mexico, which have yet to be fully negotiated away, as well as the pending review of the USMCA (United States-Mexico-Canada Agreement), which could further affect trade relations between the two nations.

In addition to the 2025 forecast, Goldman Sachs has also raised its 2026 GDP growth estimate for Mexico to 1.4%, up from its earlier forecast of 1.2%. The firm acknowledged that while 2025 will be a challenging year for growth, these revisions are a reflection of the current resilience of Mexico’s economy in the face of global uncertainties.

Alberto Ramos, Goldman Sachs’ Chief Latin America Economist, emphasized the complexity of the situation, noting that while recession risks have eased slightly, the overall growth environment remains fragile. "By all accounts, 2025 will be a highly difficult year for growth, and the outcome will largely depend on the resolution of trade issues and the pace of global economic recovery," Ramos stated in a note to clients.

As Mexico navigates through these challenges, Goldman Sachs’ revised forecast underscores the importance of U.S.-Mexico trade dynamics and global economic conditions in shaping the country's growth trajectory over the next few years.