Mexico's economic growth slowed to a 0.1pc annual pace in the second quarter, with solid growth in the agriculture sector offset by a deepening contraction in the industrial sector.

Growth of gross domestic product (GDP) in the quarter was notably stronger than the 0.4pc contraction expected by Mexican bank Banamex, but below the 0.8pc GDP growth statistics agency Inegi reported for the first quarter. Still, it marks the slowest quarterly growth since the first quarter of 2021.

Victor Herrera, director of economic studies at finance executive association IMEF, told Argus the result was "surprising … I was sure we were going to be in the red for the second quarter," adding the data shows abrupt shifts in US trade policy had been a weaker-than-expected drag on production.

Most of the second quarter's GDP growth came from a 4.1pc expansion in the agricultural sector that follows 7.2pc growth in the first quarter. The sector experienced improved climate conditions compared to the extreme heat and drought occurring in 2024.

The industrial sector — including mining, manufacturing and construction — shrank for a third straight quarter, contracting by 1.5pc after a 0.7pc drop in the first quarter of 2025.

Services expanded by an annualized 0.7pc in the first quarter, compared with 1.3pc growth in the first quarter. This marks the slowest growth in services since the end of Covid-19 restrictions in early 2021.

Mexico's economy grew 0.7pc in seasonally adjusted terms from the previous quarter, Inegi reported, up from 0.2pc in the first quarter.

By James Young