Mexico economy posts stronger third-quarter GDP growth

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Mexico economy Q3 GDP growth

Highlights

Mexico's preliminary third-quarter GDP rises 0.9% quarter on quarter, beating the 0.7% consensus but slowing from 1.4% in Q2 2026, according to HR Ratings.
Primary activities contract 0.4% in Q3 after a 2.4% rebound in Q2, with agricultural prices rising 0.78% in August and 2.21% in September due to adverse weather.
Tertiary activities, representing over 64% of GDP, grow 1.1% quarter on quarter, driven by resilient retail and wholesale trade and healthy consumer credit growth.

Preliminary GDP estimate beats forecasts

As reported by HR Ratings, Mexico’s preliminary third-quarter GDP estimate shows economic activity expands 0.9% quarter on quarter, above the 0.7% consensus forecast but below the 1.4% pace recorded in the second quarter of 2026. The ratings firm says the moderation is broad-based across the main sectors, with smaller gains in industry and services and a contraction in primary activities.

HR Ratings says the slowdown likely reflects, in part, the strong rebound seen in the second quarter after declines reported at the start of the year. Based on the latest figures, growth measured over the last 12 months rises to 1.74%, up from 0.94% in the previous quarter, and the firm says full-year 2026 growth would likely stand around 1.7% or higher if the fourth quarter slows further and earlier periods are not revised.

Primary activities contract 0.4% from the prior quarter after a 2.4% rebound in April through June. HR Ratings links that decline partly to adverse weather conditions, which affect output and coincide with monthly increases in agricultural prices of 0.78% in August and 2.21% in September.

Secondary activities grow 0.8% in the quarter, down from 1.6% previously. With data available through August, industrial activity shows strength tied to external goods demand, boosted by investment in data centers and recent stability in automotive exports, while construction also improves from weak levels seen last year; mining remains soft amid legal and regulatory challenges.

Services resilience supports annual growth trend

Tertiary activities, which account for more than 64% of GDP, increase 1.1% quarter on quarter and post a more limited slowdown than the other two sectors. HR Ratings says part of that resilience comes from retail trade, with August data indicating household spending remains supported by healthy consumer credit growth and a moderate increase in average real wages reported by Mexico’s social security institute, IMSS.

The firm also identifies support from wholesale trade, possibly linked to strong foreign trade flows, and from information and mass media services. On a 12-month basis, services growth moves above 2.0% for the first time since the end of 2024, while the secondary sector posts a 0.71% increase, its first positive reading since the third quarter of 2024, reflecting recovery from low levels, especially during 2025 when both private and public investment flows contract sharply.

Despite the stronger-than-expected quarterly reading, HR Ratings says the balance of risks remains tilted to the downside. It cites ongoing uncertainty for new investment, the possibility of further weather-related damage to primary activities at the end of the year, a potential pickup in inflation pressures that could weaken consumption, and a possible loss of momentum in the technology sector because of high capital costs, weaker profitability prospects and opposition to new data center construction.

Our earlier article on the U.S. AI data center buildout highlighted how soaring funding costs, construction delays, and power-grid constraints are making many large projects harder to deliver on time and on budget. We also noted that rising local opposition and the need to secure reliable power supplies are adding further bottlenecks, putting investor confidence and long-term returns under pressure.

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