Mexican Economy Bounces Back in Second Quarter — Update

By Anthony Harrup

MEXICO CITY--Mexico's economic activity expanded in the second quarter in a broad-based recovery after a weak start to the year, helped in part by the country's co-hosting of the 2026 soccer World Cup.

Gross domestic product, a measure of output in goods and services, rose 1.5% from the previous quarter in seasonally adjusted terms, national statistics institute Inegi said Thursday. Industrial production rose 1.6%, services increased 1.5% and agricultural production was up 3.3%.

The expansion was the biggest since the fourth quarter of 2020, and followed a 0.6% decline in output in the first quarter of this year.

"Part of this performance was likely supported by increased activity associated with the soccer World Cup, particularly in commerce, tourism and transportation," Grupo Financiero Monex analysts Janneth Quiroz and Rosa Rubio Kantun said in a note.

Growth is likely to moderate without that temporary support, while uncertainty over the annual revisions of the U.S.-Mexico-Canada Agreement and trade with the U.S. could continue to limit investment decisions in the near term, they added.

"The Mexican economy is looking at low growth toward the end of the year, as both external and domestic factors persist that make for uncertainty," said Gabriela Siller, head of economic analysis at Banco Base.

Weakening household consumption, labor market fragility and lower purchasing power of remittances given Mexican peso strength are among downside risks to growth, while fixed investment could turn lower after getting a boost from World Cup preparations, Siller said.

Mexico's second-quarter GDP was up 2.2% unadjusted from the year-earlier quarter, bringing growth for the first six months of the year to 1.2%.

Barclays analysts Nestor Rodriguez and Gabriel Casillas see upside risk to their full-year GDP growth estimate of 1.2%.

"Global manufacturing shows signs of acceleration, especially semiconductors and machinery, which have helped drive a trade surplus in Mexico in recent months," they said in a note. The fact that the USMCA will remain in place while annual revisions are carried out provide a "marginal reduction" in uncertainty as Mexico maintains its tariff advantages against other countries, they added.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

July 30, 2026 12:35 ET (16:35 GMT)