Economics: Macroeconomic scenarios 2026-2030 and their political determinants
We frame Mexico's macroeconomic outlook for 2026-2030 around four scenarios, the probabilities of which point to a predominantly adverse picture.
The most likely scenario (50%) is the inertial one, in which government policy remains largely unchanged: the erosion of the rule of law — reflected in the de facto disappearance of the separation of powers, the elimination of autonomous bodies, and discretionary application of the law — continues to discourage private investment, which has already posted annual declines of close to -4% since late 2024. Compounding this is severe fiscal constraint limiting public investment in infrastructure, health, and education, worsened by unproductive spending, the financial cost of debt and pensions, and unconditional support for Pemex. The result would be prolonged GDP stagnation (averaging 0.5%-1.3%), higher public debt, a credit rating downgrade, and social discontent that is unlikely to be reflected in electoral outcomes given government control over the INE and the TRIFE. A second scenario (30% probability) envisions Mexico accepting U.S. demands to hand over politicians linked to organized crime. This would generate a gradual and moderate recovery in confidence and investment, with GDP growth of between 1.2% and 1.8%.
At the opposite extreme, a catastrophic scenario (15%) assumes a radicalization of economic policy in the face of the government's failure to address insecurity, corruption, and social demands, through measures such as widespread price controls and wage increases far above inflation — leading to a GDP contraction of between -0.5% and -2%, a public deficit of 6.5%-8%, and a credit downgrade to "junk bond" status. Finally, the least likely scenario (5%) envisions major structural adjustments — constitutional strengthening of the rule of law, accountability, professionalization of the civil service, and greater openness to the private sector — that would allow for growth of 2%-3% and the recovery of investment-grade status.
Taken together, the four scenarios indicate that Mexico's most probable trajectory combines low growth, fiscal fragility, and institutional erosion, with a combined 65% probability that current stagnation will either persist or worsen in the coming years.
Regarding last week's indicators, retail sales in June were reported to have fallen -0.2% month on month while rising 2.0% year on year, figures that confirm the weakening trend observed since the start of the year. Meanwhile, in June, revenue (sales) from private non-financial services companies fell -0.2% month on month and -1.9% year on year in seasonally adjusted terms — the same rate of contraction accumulated over the first half of the year. Indeed, the cumulative variation for the year has hovered around -2%. Given services' relative weight in GDP, this performance is an indicator that the economy will continue to post low growth rates for the remainder of the year and, foreseeably, into 2027.
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