Mexico | GDP fell (-)0.6% QoQ in 4Q24; the biggest drop in the industry since the pandemic

Summary

The GDP data is in line with our forecast (BBVA -0.7%, consensus -0.2%), and confirms the extended weakness of the secondary sector

Key points

• Key points:
• The decline in industry is the largest since the start of the pandemic (2Q20), and is driven by the rapid slowdown in construction, following the completion of the federal government's flagship projects (with lower public and private spending).
• Regarding the tertiary sector, it continues to represent the most resilient component of supply, although it shows signs of moderation.
• We anticipate the weakness of economic activity will extend throughout 2025, in a context of high uncertainty for investment, with the implementation of the recently approved judicial reform and potential tariffs on Mexican imports in the US.
• We maintain our growth estimate at 1.0% for this year, with a downward bias given the prolonged slowdown in the economy.

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