One has to be very brave or a little crazy to have tried to make economic and political predictions for this year. With Trump being sworn in for a second term and significant uncertainty around Sheinbaum’s policy decisions and how different they might be from AMLO’s, there was a major lack of clarity around how the year would play out. That being said, being the masochist that I am, I took a shot at 12 predictions for Mexico in 2025.
You can see below how I did on each of them. Please weigh in on the comments and tell me how you think I did and if you agree.
Prediction: President Sheinbaum will remain extremely popular with the Mexican population
Late 2024 polling showed her having an exceptionally high 76% favorability rating in Mexico. I predicted that in 2025, despite a lot of uncertainty and turmoil, she would retain a favorability rating above 70%.
Result: CORRECT!
President Sheinbaum has maintained her exceptionally high approval rating with the most recent poll numbers giving her a favorability rating near or above 70%.
Prediction: President Sheinbaum and President Trump will get along better than expected.
Despite Trump’s highly confrontational style, I predicted that President Sheinbaum would successfully manage the relationship, building a productive and positive working relationship that would surprise many people.
Result: CORRECT!
All indications are that Sheinbaum and Trump have maintained a professional, respectful relationship. The two leaders have spoken by telephone five times and just recently met in person for the first time in the U.S. Despite Trump’s tough talk on Mexico, he has consistently made positive, even flattering comments regarding Sheinbaum.
Trump showed ‘a lot of respect’ in first meeting, says Sheinbaum: Monday’s mañanera recapped
Prediction: The Mexican peso will weaken to above 21 to the US dollar — maybe even 22 by year’s end.
I expected a lot of currency uncertainty throughout the year, and uncertainty tends to strengthen the U.S. dollar and weaken the Mexican peso. USMCA negotiations, foreign direct investment delays, slowing GDP growth in Mexico and a difference in interest rate reductions between the U.S. and Mexico would all contribute to peso weakness, I predicted.
Result: INCORRRECT!
The peso has defied pretty much all expectations by strengthening throughout the year versus the US dollar. Trump’s constant tariff threats against Mexico have somehow not impacted the peso. Mexico’s slow GDP growth rate has somehow not impacted the peso. Mexico’s higher inflation and quicker interest rate reductions somehow have not impacted the peso. Economic theory is somehow not applying to the peso right now.
Prediction: There will be many delays of new foreign direct investment (FDI) into Mexico in 2025, resulting in disappointing FDI numbers for the year.
I expected a drop in foreign direct investment in 2025, followed by growth in 2026 and beyond. Companies would hold off making significant FDI moves in Mexico until there was more clarity around tariff policies and USMCA renewal terms, I predicted.
Result: INCORRECT!
Foreign direct investment announcements hit a record high this year. In addition, the amount of new investment (versus reinvestment of profits) increased this year despite Trump’s tariffs and threats to blow up the USMCA. Go figure.
Prediction: Mexican GDP growth will surprise to the upside, but still be disappointingly low.
Many experts predicted 2025 GDP growth in the 1.1%-1.2% range, below predictions for the U.S. and far below what Mexico could have expected given the nearshoring opportunity. I predicted a number closer to 2% for 2025: better than expected but still way too low.
Result: INCORRECT!
I have a business degree from UW Madison and a Masters from Kellogg at Northwestern, but it sure doesn’t look like it as I got yet another economy/business-related prediction wrong. Mexico GDP growth was terrible this year, with downgrade projections happening throughout the year. Only 1% growth was expected, and the Mexican economy grew less than half of that. It’s hard to fathom that the Mexican peso strengthened, FDI hit record highs, and the economy grew less than 1%. Especially surprising given the nearly 3% growth in the U.S.
After lackluster Q3, OECD trims growth forecasts for 2025 and 2026
Prediction: Mexico will need to bring its interest rates down more quickly than the United States.
The U.S. would likely have the luxury of being able to pause its interest rate reductions for now and cut less in 2025, I predicted. Mexico was unlikely to have that ability due to a sluggish economy, declining FDI rates and slowing inflation — all factors that would contribute to the depreciation of the Mexican peso, I thought.
Result: CORRECT!
Mexico did in fact bring interest rates down more quickly than the United States as the economy continued to falter. The U.S. reduced rates at a much slower rate. But somehow the peso still appreciated versus the US dollar.
Prediction: Mexico will surprise the world by taking some substantive actions against the drug cartels.
I predicted that 2025 would be a year in which the Mexican government visibly goes on the offensive again against the cartels after six years of a “hugs not bullets” strategy (that arguably failed) by former President López Obrador. Whether that offensive would result in an actual reduction in violence was anyone’s guess, I said.
Result: CORRECT!
Mexico has taken much more visible action against the cartels than in the previous administration. Mexico handed over dozens of cartel leaders to the U.S., allowed CIA drone flights over Mexican territory, and increased arrests and drug seizures. There is still a long way to go, but there has clearly been a change in strategy under Sheinbaum.
Prediction: Mexico will take an increasingly strong stand against Chinese investments in the country.
I advised readers to look out for more tariffs in coordination with the U.S. and Canada, more actions on Chinese counterfeit goods in the country, and more actions against Chinese nationals. That course of action would be in Mexico’s best interest, and could also lead to a more productive USMCA discussion. I also predicted the tidal wave of Chinese cars and car dealerships would slow down significantly, at least for the time being.
Result: CORRECT!
Mexico finally blinked on Chinese investment, people and goods pouring into the country. A just-passed tariff on goods coming from countries without a trade agreement with Mexico will put tariffs of up to 50% on over 1,300 Chinese products. The Chinese government is not happy.
Congress approves new tariffs on goods from China and non-FTA countries
Prediction: Pemex will likely go mostly untouched in 2025, but some high profile green energy investment projects will be announced.
With so many other pressing issues to attend to in 2025, I doubted that President Sheinbaum would have the bandwidth to tackle Pemex. I did expect much more momentum around green energy projects and investments.
Result: CORRECT!
Pemex remains untouched and hemorrhaging money. Sheinbaum’s energy reform policies have thus far been too timid to have any real impact on the market. Policies are still not “investor-friendly” enough to attract private investment, and both Mexican industry and the environment continue to suffer as a result. Some green energy projects have been announced, but they’re a drop in the bucket compared to the potential.
Prediction: Less cynicism and more optimism will take hold on Mexico’s all-in focus on trains.
Both the Maya Train and Interoceanic Train would demonstrate their value, I said, and excitement would build around the newly planned and soon-to-be-constructed routes in the center of the country heading north.
Result: INCORRECT!
Although it is still very early in terms of being able to weigh in on these two mega infrastructure projects, it would be hard to argue that excitement for either one is increasing. A harsh reality seems to be setting in that ridership increases will take much longer, and a return on investment might take decades or longer. This does not make the projects a failure, as the impacts of projects of this scale need to be evaluated over many years. In fact, Sheinbaum’s administration is doubling down on trains with several new projects nationwide. This is a very big bet that will either be the pride and joy or the laughing stock of the country for generations. Only time will tell.
Prediction: Mexico City will continue to get the recognition and visibility it deserves for being one of the great cities of the world.
The city, which had very few tourists in the past, was booming with tourism in 2024. In 2025, I expected to hear more people than ever saying “I had no idea CDMX was such a great city … Who would have ever thought?” (Cue the eye rolling.)
Result: CORRECT!
On pretty much any metric, Mexico City continues to gain momentum as one of the great cities of the world. The world’s top singers want to perform (and eat tacos) there. Sport teams from around the world want to play there. An increasing amount of tourists from around the world want to enjoy the city’s great parks, museums, restaurants, and neighborhoods. It’s a wonderful sight to see.
Prediction: Tourist numbers will continue to hit new records throughout the country.
I predicted that the weakening peso, a strong U.S. economy, the booming cruise industry and lots of new flights would keep tourists coming in record numbers again in 2025.
Result: CORRECT!
Mexico has smashed new records of tourists this year, with a year-to-date 13% increase in international visitors. Lots more Canadians have been coming. Expect another record next year with continued momentum and the World Cup.
In summary, I think that I did OK and in fact scored slightly higher than last year. Eight correct versus four incorrect — and I am losing sleep over how I have gotten the economic ones incorrect!
What do you think? Do you agree with my assessment? How did the year play out compared to what you expected? How did you do with your own predictions for the country? Stay tuned next week as I make my 2026 predictions. I guess you could say I am a glutton for punishment!
Travis Bembenek is the CEO of Mexico News Daily and has been living, working or playing in Mexico for nearly 30 years.
Source: Mexico News Daily
