Mexico Weekly Economic Overview (September 8–12, 2025)

Mexico closed last week with a split message on its economic health: inflation remains under control, but industrial activity is sliding fast—raising doubts about the country’s growth entering the last quarter of 2025.

The National Statistics Institute (INEGI) reported on September 9 that consumer prices rose just 0.06% in August from July, leaving annual inflation at 3.57%.

That is almost unchanged from July’s 3.51% and well inside the central bank’s 2–4% comfort zone.

Core inflation, which excludes fuel and food, rose slightly faster at 0.22% month-to-month, keeping the annual core rate relatively sticky at 4.23%. In short: prices are not spiraling, but underlying cost pressures remain.

Two days later, however, came a different story. July industrial output dropped 1.2% month-on-month after already slipping 0.3% in June.

Compared with last year, output was down 2.7%. Nearly all sectors contributed—from car assembly lines to construction sites—reflecting both weaker global demand and softer local investment.

It was one of the sharpest monthly drops since late 2022 and a sharp contrast to the steady appetite U.S. consumers still show for Mexican autos and electronics.

Mexico Weekly Economic Overview (September 8–12, 2025)

Consumer confidence is also showing cracks. A key survey (Thomson Reuters/Ipsos) slipped in September to 52.74, down from 53.15, highlighting unease about job security and household purchasing power.

Meanwhile, financial markets told a more upbeat story. Speculators continued to bet on the peso, with net long positions rising slightly in Chicago futures data to 73,700 contracts, reflecting confidence in the currency’s high interest-rate carry trade.

These mixed signals matter because Mexico’s economy is unusually sensitive to external demand, especially from the U.S., and to shifts in domestic confidence.

Controlled inflation gives the central bank (Banxico) room to continue its cautious path of lowering interest rates.

But if industry keeps contracting and consumers stay cautious, monetary easing alone may not be enough to lift momentum.

In other words: inflation stability is reassuring, but Mexico is not out of the woods.

The industrial slump—combined with signs of consumer hesitation—is flashing a warning that the country’s growth engine may be stalling just as global conditions turn more uncertain.

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