The International Monetary Fund (IMF) recently issued its updated global economic forecast in April 2025. Overall, the global economic growth saw a large downward revision. The IMF explicitly blames tariffs for increased “restrictions affecting trade flows”. Both Canada and Mexico had major downward revisions to GDP indicating that both are headed into a recession. Canada has been revised to a -0.6 ppts as Mexico has been revised to -1.7 ppts for 2025.
Mexico Offers a Pro-Business Climate Amid Global Recession
The good news for investors and companies looking to develop projects in Mexico is that they will find a very receptive and eager, pro-business minded climate. Mexican companies and business associations have indicated that they are eagerly seeking opportunities for trade and development with new partners.
Why NOW is the best time to invest in Mexico
During a recession the manufacturing industry in Mexico has traditionally turned to diversifying product lines, investing in technology and innovation and diversifying its trading base, seeking new opportunities to offset the drop in sales and consumer demand. This will inevitably occur in Mexico this year and the next. The good news is that it will be one of the first economies to rebound quickly when the trade war stabilizes and new trading partners are found.
Lessons from the 2008 Global Financial Crisis
The Mexican economy was significantly affected by the 2008 financial crisis. The crisis, originating in the U.S. housing market, led to a sharp decline in Mexico’s GDP and employment, surpassing even the impacts of the 1980s debt crisis. This was due to Mexico’s close economic ties with the U.S., including a sharp drop in exports and foreign direct investment.
This severely impacted Mexico, causing a significant contraction. Mexico’s GDP dropped by 9% in 2009. While the Mexican economy initially experienced a sharp downturn, it rebounded relatively quickly, reaching pre-crisis production levels within a year, by 2010. The manufacturing sector, which was heavily affected, showed signs of recovery within a relatively short timeframe, with a turnaround in just five quarters.
While manufacturing can be significantly impacted by recessions or economic downturns, it also often experiences faster recovery periods than other sectors of the economy. The industrial sector can rebound quickly as consumer spending recovers and demand for manufactured goods returns.
Mexico’s Fast Recovery After COVID-19
The Mexican economy shrank 4.5 percent in 2020 as the pandemic ravaged factories, businesses, and households. It was the greatest contraction since the 1994 Tequila Crisis that followed a peso devaluation. However, as the data from late 2022 indicate, most sectors recovered quicky and some, like leisure and hospitality, have exceeded pre-pandemic levels. In fact, the Mexican economy was the fastest to recover starting in third quarter 2020. GDP returned to pre-pandemic levels as of third quarter 2022. The first sector to recover was manufacturing; services took longer.
“HE HOW HESITATES IS LOST”
If you are still hesitating in investing and trading with Mexico, finding clients, partners, and supply chain providers, then you really don’t know what you’re missing. This is a unique opportunity, and you should grasp it.
Start Your Investment Journey with Mextax and Mexlaw
The best way to start a business in Mexico is with expert legal and tax guidance. At Mextax and Mexlaw, we help international investors and entrepreneurs establish operations quickly, legally, and with full compliance.
Let us guide you—step by step, and hand in hand.
