This week, the Spring Meetings of the International Monetary Fund and the World Bank were held in Washington, D.C. against an unusually somber backdrop. The most relevant data point is the cut in the Fund’s global growth expectation from 3.4% projected in January to 3.1%. The reason is evident: since late February, the conflict – or multiple conflicts – in the Middle East have generated negative supply shocks in energy markets and global supply chains.
Despite the recently announced opening of the Strait of Hormuz, the supply shock – even if temporary – has already occurred. Approximately one-fifth of the world’s oil passes through the strait, supplying energy to China and other Asian countries, and a significant portion of Qatar’s natural gas production, in addition to essential fertilizers for the agricultural sector. Although the strait has opened, the distortion in supply chains will take time to normalize, assuming the conflict dissipates and Iran yields on everything it apparently yielded. This was the central coordinate around which virtually all the week’s discussion revolved.
The IMF presented three scenarios in its World Economic Outlook. The first, the baseline, assumes a conflict limited in duration and scope under which global growth would fall to 3.1% this year. In the adverse scenario, which assumes greater energy disruption, the world would grow by only 2.5% and inflation would reach 5.4%. In the most severe outlook, which considers disruptions extending into next year, global growth would be just 2% – a level reached only four times since 1980 – and inflation would exceed 6%.
The World Bank suggested that countries avoid implementing energy subsidies that they could not fiscally sustain because this would generate greater problems in the future by deteriorating their fiscal space. In Mexico, the warning should resonate. The IEPS subsidy on fuels implies a revenue waiver that the Treasury must monitor.
The IMF slightly increased its growth expectation for Mexico this year, from 1.5% to 1.6%, which is lower than the bottom end of the range expected by the Ministry of Finance in the General Economic Policy Pre-criteria 2027, where it estimates the growth of the Mexican economy to be between 1.8% and 2.8%. While the IMF improved its outlook, the reasons behind it are not structural; they are merely comparative. That is, the IMF suggests that Mexico will grow more in 2026 basically because it grew very little in 2025.
The World Bank’s forecast is less optimistic than the IMF’s. It did not change its expectation and kept it at 1.3%, but it did reduce the projected growth for 2027 from 1.8% to 1.7%. This is not too distant from the lower end of the range estimated in the aforementioned Pre-criteria, which is between 1.9% and 2.9%
What both agree on is the underlying diagnosis: the low growth experienced by Mexico will continue in 2026. There is a lack of public infrastructure investment projects, and uncertainty about trade policy works against growth.
Inflation has become a specific concern for Mexico. The IMF forecasts that inflation will reach an average of 3.9% this year, just within the Central Bank’s range of 3% +/- 1%, but there was an upward revision from the previous forecast of 3.3%. Even before the conflict in the Middle East erupted and thus upward pressures on energy prices occurred, inflationary pressures in Mexico have increased, which would seem to indicate that the possibility of interest rates continuing to fall is becoming more difficult, although we do not have clarity on Banxico’s intentions.
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Perhaps the most serious alert about Mexico raised by the IMF came in the Fiscal Monitor. Government debt – counting all liabilities – approached 61.8% at the end of 2025 and will continue to increase to above 63%, remaining there until 2031 if the trend continues. It is the first time in more than 20 years that government obligations exceed 60% of GDP, and according to the IMF, the proportion compares unfavorably with the average debt of emerging economies – excluding China – which stands at 57.5%.
The IMF also forecasts that the country’s fiscal consolidation will be achieved until 2027, when the public deficit would fall to 3.5%, which contrasts with government estimates that anticipate a faster recovery. Evidently, these are only forecasts, but if the Fund’s projection is confirmed, it would be another year in which fiscal objectives are not met. It should also not be forgotten that 2027 is an election year.
The Fund added that it is essential for Mexico to seek fiscal consolidation not only through spending cuts but also through increased revenue, which, in principle, could only be achieved at this moment with greater growth, something that is not very apparent given the prevailing internal and external uncertainty.
Both in the meetings and in the parallel forums of the week, the review of the Treaty between Mexico, the United States, and Canada hovered over the discussions. Outwardly, the vision of an integrated North America was the most common, but in smaller conversations, different scenarios were discussed: bilateral agreements, small advances in aluminum and steel tariffs in exchange for improvements in security and port and customs control, a zombie trilateral agreement that allows progress to continue, but without completely eliminating uncertainty. The bet, perhaps, is that the uncertainty that currently halts investment will have diminishing marginal returns.
The Washington meetings were not only a forum for analysis for Mexico but also a platform for intense bilateral management. In addition to the meeting with the U.S. Treasury, there were meetings with the three major rating agencies —Moody’s, Fitch, and Standard & Poor’s— and with international financial institutions and investors, as well as participation in the general sessions of the IMF and the World Bank.
In summary, the outcome of the week leaves Mexico at a turning point: multilateral organizations recognize its macroeconomic strengths and relative fiscal discipline, but they are emphatic in pointing out that growth will remain insufficient, debt will continue to rise, and risks — both internal and external — are substantial. The USMCA window, the inflation trajectory, and the government’s capacity to generate more fiscal revenue will be the determinants of the next chapter.
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