Some negative economic news about our southern border neighbor.

 

Growing slowly south of the border

The economic news out of Mexico is a problem for Mexico.

Silvio Canto, Jr. | May 24, 2026 www.americanthinker.com

A Mexican friend recently said something like this: “Why are we sending oil to Cuba when we have our economic problems?” My friend’s words made more sense today after reading this economic update:

Mexico’s economy shrank 0.6% in the ​first quarter from the previous three-month period, data from the ‌national statistics agency INEGI showed on Friday, compared with a 0.8% decline expected by economists in a Reuters poll.

Latin America’s second-largest economy pulled back ​after revised growth of 0.7% in the fourth quarter of ​2025.

“The weakness was broad-based across the major sectors, reinforcing ⁠the view that the slowdown reflects fading domestic momentum rather ​than an isolated shock,” said Andres Abadia, chief LatAm economist at​Pantheon Macroeconomics.

Primary activities, which include farming, fishing and mining, recorded the steepest decline with a fall of 1.7%, according to INEGI’s data.

The secondary sector, which ​includes manufacturing and construction, and tertiary activities, which cover services, ​were down 1% and 0.4% respectively.

In annual terms, the economy expanded 0.2% compared ‌to ⁠a year earlier, slightly above the 0.1% growth expected by economists.

It looks like an economic slowdown south of the border. And another friend who just got back from a business trip to Mexico told me that gasoline prices were also very high.

Add to the bad economic news the information that remittances are down. As you may know, money going from here to there is not just cash transfers. It translates into food on the table and the ability to pay for many essentials of life. Here is that report:

Remittances to Mexico from abroad declined by 4.6% in 2025, to a total of US $61.8 billion, marking the biggest fall since 2009, the Bank of Mexico (Banxico) reported on Tuesday.

Remittances contributed 3.4% of Mexico’s GDP in 2025, according to an analysis by Banco BASE’s director of economic analysis, Gabriela Siller.

3.4% of GDP is a large number, and it represents a much larger share of many family budgets, particularly in the country’s rural areas. The remittances have turned into a double-edged sword. On the one hand, it supports families. On the other hand, it makes them dependent on their families up here.

Last, but not least, the US-Canada-Mexico free trade agreement is up for review soon. Add to all this the security issues, and China using the agreement to enter the US and Canadian markets.

Stay tuned for Mexico growing below expectations.