---
title: "Bank of Mexico sees recession possibility, halves 2025 growth view"
description: "MEXICO CITY, Feb 19 (Reuters) - The Bank of Mexico on Wednesday halved its growth forecast for the Mexican economy this year and even sees a possibility it will slide into a recession, contracting by as much as 0.2%."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Newsdeck"
author: "Reuters"
author_url: "https://www.dailymaverick.co.za/author/reuters/"
canonical_url: "https://www.dailymaverick.co.za/article/2025-02-20-bank-of-mexico-sees-recession-possibility-halves-2025-growth-view/"
published: "2025-02-20T06:47:30"
updated: "2025-02-20T06:47:32"
lang: "en-ZA"
word_count: 208
---

# Bank of Mexico sees recession possibility, halves 2025 growth view

> MEXICO CITY, Feb 19 (Reuters) - The Bank of Mexico on Wednesday halved its growth forecast for the Mexican economy this year and even sees a possibility it will slide into a recession, contracting by as much as 0.2%.

By Reuters · Published 20 February 2025, 08:47 SAST · Updated 20 February 2025, 08:47 SAST

## Key points
- Mexico's economy is now teetering on the edge of stagnation with a growth forecast slashed to 0.6%, while inflation stubbornly refuses to play nice, prompting the central bank to keep its rate-cutting scissors handy amidst a cocktail of internal and external uncertainties.
- Mexico's economic growth forecast downgraded to 0.6% for 2023, down from 1.2%, amid rising inflation concerns.
- Banxico warns of potential further economic slowdown in 2025 due to high uncertainty from both domestic and international factors.
- The central bank projects fourth-quarter inflation to hit 3.3%, up from a previous estimate of 3%.
- Despite inflationary pressures, Banxico plans to continue cutting benchmark interest rates, having recently reduced it by 50 basis points.

## Content

It said Latin America's second-largest economy is now forecast to grow just 0.6% this year, from 1.2% previously, and also said it now expects inflation to take longer to ease to its target of 3.0%.

"The economy could slow down even further in 2025, in an environment in which high uncertainty due to internal and external factors," it said.

It called the Trump administration's actions on migration, trade and other areas "an important" challenge for Mexican growth projections but added domestic factors were also boosting uncertainty.

Banxico, as the central bank is known, also forecast annual headline inflation for the fourth quarter of 3.3%, versus a prior projection of 3%.

While some analysts consider core inflation, which excludes volatile energy and food prices, as more reliable, the bank sees it running at the same 3.3% pace in the year's final quarter.

Still, Banxico said the inflationary environment would likely permit it to continue cutting the benchmark interest rate.

Earlier this month, Banxico [cut the key interest rate](https://www.reutersconnect.com/all?search=all%3AL1N3OX14X&linkedFromStory=true) by 50 basis points, saying it could cut by a similar magnitude in the future as inflation cools and after the economy contracted slightly late last year.

(Reporting by Anthony Esposito and Stefanie Eschenbacher; Editing by Christian Plumb and Sandra Maler)