The International Monetary Fund (IMF) has concluded its 2024 Article IV consultation with Mexico and approved the mid-term review under its Flexible Credit Line (FCL), affirming Mexico’s access to around $35 billion. While Mexico’s economy shows signs of deceleration, the IMF commended its fiscal policies and financial stability.
Mexico’s macroeconomic policies and institutional policy frameworks remain very strong, with a flexible exchange rate regime, a credible inflation targeting framework, a fiscal responsibility law, and a well-regulated financial sector.
Economic growth in Mexico is slowing, with GDP expected to expand by just 1.5% in 2024, reflecting limited capacity and tight monetary policy. Inflation pressures are easing, with projections to meet the central bank’s 3% target by 2025. The IMF advised that fiscal tightening, planned for 2025, is essential to keep public debt in check as fiscal deficits rise.
“Mexico has maintained strong policies despite external risks and will benefit from this precautionary arrangement as a buffer,” said IMF Deputy Managing Director Gita Gopinath. Mexico continues to meet the qualifications for the FCL, thanks to its robust institutional frameworks and steady macroeconomic performance.
The FCL is expected to support Mexico as it navigates risks from global financial markets and the U.S. economic slowdown. This consultation underscores the IMF’s approval of Mexico’s strategy to keep the credit line as a precautionary measure, fortifying its economic resilience.
