October indicators show an uneven recovery
The trend-cycle measures in IMEF's leading-indicator report still point to a fragile and uneven recovery, according to Xinhua's account of the findings.
The October 2026 non-manufacturing trend-cycle reading reached the neutral threshold of 50.0 points, up from 49.8. A separate measure adjusted for firm size gained 2.1 points to 51.5, moving back into expansionary territory.
Manufacturing's firm-size-adjusted sub-index moved in the opposite direction, losing 0.6 points to 51.1. It nevertheless stayed in expansionary territory, indicating relatively favorable conditions in some productive segments.
GDP, exports and investment
INEGI's preliminary Timely Estimate of GDP put third-quarter growth at 0.9% from the previous quarter and 3.2% from a year earlier. Industry and services more than offset a 0.4% quarterly contraction in agricultural activities (1.8% annual).
IMEF's Indicator Committee forecasts growth of around 1.5% for 2026 as a whole, which it said was consistent with the preliminary third-quarter result. The IMF also projected 1.5% growth for 2026 in its Article IV concluding statement published October 2. It forecast 1.8% for 2027, with external uncertainty remaining the main constraint on growth.
Exports increased 38% from a year earlier in September, IMEF reported, driven by a 39% rise in manufacturing exports and a 95% jump in shipments of electrical and electronic equipment. Those gains came despite uncertainty surrounding negotiations over the USMCA, known in Mexico as T-MEC.
Investment data also showed gains, though the committee remained cautious about their durability. Gross fixed capital formation rose 6% year over year in July, its fourth consecutive month of annual growth following 19 months of declines. The committee said there was not yet a consensus that this represented a definitive change in trend.
Inflation and the November rate decision
IMEF expects annual inflation to end 2026 at around 4%, still above Banco de México's permanent 3% target. It said the central bank's Governing Board would likely leave the benchmark interest rate at 6.5% at its November 5 policy decision.
In its October 2 statement, the IMF described headline inflation as near target while noting that underlying, or core, price pressures persisted.
Fiscal pressures beyond 2026
IMEF identified pensions, debt financing costs, social programs and support for Pemex as constraints on Mexico's fiscal room.
The group said 2027 and 2028 would be decisive for fiscal adjustments, stronger economic growth and efforts to contain debt. Without those steps, it warned, Mexico could face risks to retaining its investment-grade status by 2029.
