The International Monetary Fund (IMF) has projected that the US economy will expand by 2.7% in 2023 and 2.1% in 2024, driven by looser fiscal policy and measures such as tax cuts. The IMF attributes this growth to the easing of overly restrictive regulations and streamlined bureaucratic processes for businesses, which could accelerate short-term growth in the US through increased investment.
However, the IMF cautions that excessive deregulation, which could limit risk-taking and lead to debt accumulation, may result in a boom-and-bust cycle in the US in the longer term, with repercussions for the rest of the world. The institution also highlights that disruptions to the labor market caused by reduced migration flows to the US could permanently reduce potential output and increase inflation during the adjustment period.
The IMF further warns that if the negative effects of tariffs and labor force reductions prevail, global and US economic activity could be negatively impacted in the medium term.
Mexico, with the second-largest economy in Latin America and the 13th largest globally, aims to return to the top 10. However, the IMF predicts that Mexico will fall to 15th position this year, overtaken by Spain and Australia, as its economy is expected to grow by 1.4% in 2025 and 2% in 2026, lagging behind its main trading partner, the United States.
The IMF attributes Mexico's weaker growth to the impact of monetary tightening, constraints on production capacity, unforeseen effects of recent institutional reforms, increased global risk aversion, and a US economic slowdown.
The IMF forecasts that Mexico's GDP will remain in 15th place until 2027, when it will regain a higher ranking than Spain and reach 14th position, a position it will maintain in 2028 and 2029.
On a global scale, the IMF has warned that intensified protectionist policies, such as a new wave of tariffs, could exacerbate trade tensions, dampen investment, reduce market efficiency, distort trade flows, and further disrupt supply chains.