Mexico Avoids Recession Despite Tariff Uncertainty

Mexico City: Mexico's economy returned to growth in the first quarter of 2025, avoiding a recession despite uncertainty over US President Donald Trump's sweeping tariffs, official data showed Wednesday.

Gross domestic product (GDP) grew 0.2 percent from the fourth quarter of 2024, when Latin America's second-largest economy had contracted for the first time in three years, national statistics agency INEGI reported.

Year-on-year, GDP rose 0.6 percent in the first quarter, it said in a preliminary estimate.

The new data means Mexico outperformed the US economy, which contracted in the first three months of the year, according to data published Wednesday.

The resilient performance eased fears of a recession, which is generally defined as two consecutive quarters of economic contraction -- for now, at least.

The International Monetary Fund has predicted that Mexico's economy will shrink by 0.3 percent this year.

President Claudia Sheinbaum has said her outlook is more optimistic, because of the government's efforts to boost the economy and attract foreign investment.

Trump has announced various tariffs targeting Mexico, as well as several policy U-turns, as part of his global trade war.

While he left Mexico off the list of nations facing his "reciprocal tariffs," its carmakers as well as steel and aluminum exporters still face duties.

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