GDP expanded 0.2% quarter-over-quarter in Q1 2025, rebounding from a 0.6% contraction in Q4 which can primarily be attributed to a strong rebound in the agricultural sector with its best quarterly performance since 2011. Uncertainties around trade policy, which have dampened investment and industrial output, caused the industrial and service sector to stagnate.

By skirting recession, macro fundamentals remain intact, and the current growth pause gives investors an entry point before supply tightens in the next upswing.

Despite inflation remaining slightly above target, the Bank of Mexico cut rates by another 50 basis points last week, bringing the benchmark rate to around 8%, its lowest level since 2022 and signaling more accessible financing ahead for real estate investments.

Another key gauge of Mexico’s long‐term growth prospects and a barometer of foreign investors’ confidence is Foreign Direct Investment (FDI). Under the USMCA framework and government incentives for renewable energy, automotive and electronics reshoring, companies like BMW, Foxconn and Google have committed billions of dollars to new plants and R&D centers.

This steady uptick in FDI not only injects capital into local economies but also creates high‐wage jobs, fosters technology transfer and strengthens supply‐chain integration. For real‐estate developers, robust FDI signals sustained demand for both industrial land and high‐end residential housing, particularly in dynamic coastal regions like Puerto Escondido, where an influx of expats and digital nomads further bolsters market fundamentals.