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Mexico Investment Slide Extends to 12 Months as Inflation Cools and Banxico Eases to 7.25%

The latest data signal a fragile expansion with industry contracting in Q3 even as household spending recovered in August.

Overview

  • Fixed investment fell 2.7% month over month and 8.9% year over year in August, marking a full year of annual declines, according to Inegi.
  • Public capital outlays dropped 22.2% year over year, non‑residential construction sank 18.5%, and spending on machinery and equipment contracted 10.5% in August.
  • Private consumption rose 0.6% from July and 0.9% from a year earlier in August, offering only a modest offset to weak investment.
  • Inegi’s preliminary reading shows GDP shrank 0.3% quarter over quarter in Q3 2025 as industrial activity fell 2.9% in the period.
  • Headline inflation slowed to 3.57% in October while core held at 4.28%, and Banxico cut the policy rate by 25 basis points to 7.25% with further reductions under evaluation.