ISTANBUL

Mexico's economic growth is expected to slow down to 1.5% in 2024, from 3.2% in 2023, according to the International Monetary Fund (IMF) on Friday.

Latin America's second-largest economy is anticipated to further slowing down to 1.3% in 2025.

"Economic activity is moderating, with private consumption and investment decelerating, and employment growth is slowing," said the report.

"The Mexican economy is decelerating and inflation pressures are receding," it added. "Notwithstanding the procyclical fiscal expansion in 2024, monetary policy has been successfully calibrated to reverse the upswing in inflation and the authorities are planning a sizeable front-loaded fiscal consolidation for 2025."

However, Mexico’s macroeconomic policies and institutional policy frameworks remain strong, with a flexible exchange rate regime, a credible inflation targeting framework, a fiscal responsibility law, and a well-regulated financial sector, according to the IMF.

Mexico also continues to be exposed to sizable external risks amid uncertainties, which include risks rising from the dynamics of the US economy and changes in global financial market conditions, the financial institution said.