Mexico Reverses Early-2025 Slump With Modest Q2 Demand Recovery

(MENAFN- The Rio Times) Mexico posted stronger economic momentum in the second quarter of 2025, with aggregate demand rising 1.4% from the previous quarter, reversing a contraction of 1.1% in Q1.

On an annual basis, demand edged into positive territory at 0.3%, compared with a 0.2% decline a year earlier. Private consumption, the backbone of the Mexican economy , improved by 1.2% on the quarter, a notable shift after a 0.4% contraction in the prior period.

Annual figures remained slightly negative at –0.4%, but the quarterly rebound suggests households are cautiously resuming spending. Mexico's numbers matter for two reasons.

First, they show domestic demand-the piece that drives jobs and investment-is stabilizing after a weak start to the year. That is critical at a time when exports face global headwinds, especially from softer U.S. industrial orders and slowing Asian trade flows.

Second, the recovery is modest and uneven. The quarterly bounce looks encouraging, but the fact that annual private spending is still in contraction highlights how fragile household confidence remains in the face of high borrowing costs and inflation that has only recently started to cool.



For international observers, the takeaway is that Mexico is not sinking into recession but also not breaking out into sustained growth. Instead, the country is sitting in a middle lane: resilient enough to avoid contraction, yet vulnerable to global demand shocks.

Its reliance on U.S. economic conditions, particularly consumer and industrial demand north of the border, means that any slowdown in the U.S. will quickly ripple south.

Mexico is Latin America's second-largest economy and a key link in North American supply chains. The Q2 data show recovery, but the strength of that rebound-and whether it lasts-will depend less on Mexico itself and more on global trade winds and the durability of U.S. growth.

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