OECD Cuts Mexico’s 2026 Growth Forecast but Sees a Brighter 2027

• Mexico received a mixed report from the Organisation for Economic Cooperation and Development (OECD) this week, as the intergovernmental policy forum joined other recent prognosticators in lowering the GDP growth outlook for the rest of this year but boosting the forecast for next year from 1.7% to 1.8%.
• In cutting Mexico’s expected 2026 growth rate from 1.3% to 0.8%, the OECD cited economic policy uncertainty, trade tariffs and fiscal consolidation. The forecast was included in the OECD’s June Economic Outlook for Mexico, in which it projected that the Mexican economy will maintain moderate growth, supported mainly by domestic demand and private consumption, and favoured by low unemployment. It added that lower interest rates “will gradually boost private investment, but recovery will be gradual against a backdrop of persistent national and international uncertainty.” The forecast also sees inflation gradually moderating to 3.2% by 2027.
• While the report acknowledged the solid growth that marked the end of 2025, it pointed out that economic activity weakened sharply at the beginning of 2026, registering a 0.6% quarterly contraction of gross domestic product. The latest Economic Outlook represented a 0.5% reduction from the OECD’s previous forecast, issued in March. At that time, the organisation suggested Mexico needed to continue reducing the fiscal deficit through good-faith measures on both the expenditure and revenue sides.
• The OECD also urges boosting revenues and improving the quality of public spending to safeguard fiscal sustainability and create more room for productivity-enhancing public spending.

(Source: Mexico News Daily)