Mexican regional economies show growth in late 2025, face complex outlook
Banco de México's latest report on regional economies for October-December 2025 indicates economic activity expanded across all regions, driven by tertiary sectors and industrial recovery. The report also highlights key risks and special studies on manufacturing, digital inclusion, and employment.
Broad-based growth across Mexican regions
In the fourth quarter of 2025, Mexico's GDP showed accelerated growth after a period of low dynamism.
This improvement stemmed from an expansion in tertiary activities and a certain reactivation of industrial production, while primary activities contracted.
Economic activity is estimated to have grown across all regions during the reference quarter.
The North saw advances driven by manufacturing and trade, the Central North by the tertiary sector, and the Center by construction, mining, trade, and tourism.
In the South, growth was broader, with increases across primary, secondary, and tertiary sectors, partially reversing the decline observed since early 2024.
The report also incorporates four special sections delving into key regional development topics, including manufacturing patterns, digital inclusion, employment access, and commuting times.
Inflation dynamics and business outlook
Annual general inflation showed differentiated behavior across regions between Q3 and Q4 2025.
It decreased in the North and South, remained stable in the Central North, and increased in the Center, influenced by public transport tariff adjustments in November.
Core inflation rose in most regions, while non-core inflation remained low.
Business executives' expectations for demand, employment, and fixed asset investment remained in expansion across all regions for the next twelve months.
Most executives anticipate sales prices, input costs, and wage costs to grow at rates equal to or lower than the previous year, despite persistent challenges.
Resilience amidst persistent challenges
The report confirms a resilient economic recovery in late 2025, but it underscores the persistent regional disparities and external vulnerabilities.
While business expectations remain positive, the identified risks like public insecurity and T-MEC uncertainty highlight the fragility of the outlook.
Strengthening internal growth drivers and leveraging trade agreements are crucial, yet their implementation faces significant structural headwinds.