INEGI Flash Estimate: Mexico's Economy Contracted 0.8% in Q1 2026, All Sectors Declined

Mexico's national statistics agency (INEGI) released its flash GDP estimate for Q1 2026 on April 30, showing the economy contracted 0.8% quarter-over-quarter — the worst sequential decline since Q4 2024 and a steeper fall than market consensus. All three major sectors declined: primary activities (agriculture, livestock, fishing) fell 1.4%; industrial activities (manufacturing, construction, mining) fell 1.1%; and tertiary activities (services, commerce, tourism) declined 0.6%. Year-over-year, the economy grew only 0.2% in seasonally adjusted terms, essentially stagnating. The contraction reflected: continued investment uncertainty stemming from the 2024 judicial reform's impact on rule-of-law perceptions; the 25% US tariff on non-USMCA qualifying goods weighing on export-oriented manufacturing; construction delays in major government infrastructure projects; and a deceleration in consumption spending. The data directly prompted Sheinbaum to announce Plan México Acciones four days later (May 4) — a MX$5.6 trillion public-private investment framework intended to reverse the contraction trend. Banxico responded with a 25bp rate cut to 6.5% (May 7). Mexico's full-year 2026 GDP growth forecast was revised down to approximately 1.3%, driven largely by the anticipated World Cup tourism boost in Q2–Q3.