LatinNews Daily - 19 June 2026

*BBVA México, the Mexican branch of Spanish-owned BBVA bank, has lowered its growth forecast for Mexico to 1.2% from its previous 1.8% forecast in March citing “weak domestic demand and a prolonged environment of uncertainty”. It notes the Q1 2026 contraction in GDP, which it attributes to lower private consumption and a fall in investment. BBVA México also highlighted that manufacturing activity “remains affected by the moderation of sectors more closely integrated with the US’ industrial cycle and business caution”. It estimates that the structural weakness of domestic demand will limit the positive impact of the Fifa World Cup 2026, which Mexico is co-hosting along with the US and Canada. It also warned that the “gradual deterioration of the labour market”, “uncertainty associated with the new judiciary” (a reference to the controversial judicial reform which took effect in September 2024, and allowed for the judiciary to be elected by the public, among other changes), and revision of the US-Mexico-Canada Agreement (USMCA), which is taking place this year, will continue influencing companies’ investment decisions. BBVA México highlights that “formal employment growth remains constrained amid rising informality and weaker business dynamism” and forecasts formal employment growth of 1.4% in 2026 and 2.0% in 2027. It also forecasts that headline inflation will close 2026 at 4.1%, up 0.2 percentage points on its previous forecast, with core inflation at 3.9% and expects both to converge to 3.5% in 2027.

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