Mexico | Economy grew 1.0% QoQ in 3Q24; headwinds for 2025

Summary

The tertiary sector surprises on the upside with a growth of 0.9% QoQ, while the industrial sector grows 0.9% as manufacturing moderates its slowdown (primary sector 4.6%).

Key points

• Key points:
• Although GDP growth during 3Q24 represents favorable data for this year's growth, it is unlikely that this same dynamism will extend to 2025, in a context of uncertainty for investment derived from the recent judicial reform, in addition to the fiscal consolidation already announced by the current administration.
• Regarding the industry, 3Q24 growth (0.9% QoQ) was supported by moderate growth in manufacturing, given the resilience that external demand has shown in recent months (derived from the strength of private consumption in the US).
• With respect to the tertiary sector, the growth of 0.9% QoQ during 3Q24 suggests resilience of private spending, despite the slowdown in the real wage bill; the most recent data from Banxico suggest that in recent months private spending may have been supported by a reduction in household financial savings, as indicated by the lower growth of the balance in deposit accounts.
• We anticipate the outcome of the US elections as a risk to economic activity in 2025; among the factors that could have a positive impact on GDP growth in the coming years is the gradual materialization of nearshoring.

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