Mexico's GDP Contracts 0.6% in Q4, Largest Decline Since 2021

Mexico's economy experienced its largest contraction since 2021, with a 0.6% decline in GDP during the fourth quarter of 2024, marking the first quarterly drop in over three years. This decline was attributed to significant decreases in agricultural output, down 8.5%, and industrial production, which fell by 1.5%. Despite this contraction, the GDP grew by 0.5% year-on-year, although this was below earlier estimates. Analysts point to ongoing challenges, including tight financial conditions and trade tensions with the United States, which threaten future economic stability. The Bank of Mexico has revised its growth forecast for 2025 down to 0.6%, reflecting concerns over domestic consumption and investment amid potential tariff threats. In response to the economic slowdown, the central bank has indicated it may continue to lower interest rates to stimulate growth.