EconomyForeign trade and USMCAPoliticsEnergy, technology and environment
Weekly Report — 23 October 2026
+3.4%
Annual growth of the economy in the third quarter, according to IOAE
42 months
Consecutive months of decline in manufacturing employment, as of August
3.62%
Annual inflation in the first half of October, picking up speed again
Economy
IOAE, an early warning index of GDP (later to be confirmed or corrected by IGAE), shows Mexico's economy grew 3.4% in the third quarter, at annual rate, pushed by manufacturing and construction. This could lead to an overall 2026 growth of 1.6%, although analysts warn the recovery is far from solid and private investment must still increase.
In August, manufacturing had its best result in three years, pushed by computing and electronic equipment. The annual rate (physical volume, not value) was 4.1%. Although oil and coal products grew 23.5%, this is most likely a temporary spike; computing and electronics equipment grew a less volatile 5.8%, while machinery and equipment in general grew 4%. Analysts worry that this trend has not solidified, that it is very heterogeneous, and that the most successful sectors add little Mexican value and relatively few jobs.
In fact, total employment in manufacturing diminished 1% at annual rate, also in August, its 42nd consecutive month of decline, with almost 250,000 fewer jobs since January 2023.
According to INEGI, so far in the year total employment has declined by a net 401,992. This is the result of 426,934 jobs lost in the informal sector, and 24,492 new formal jobs. Mexico should be creating over a million formal jobs each year to accommodate new entrants to labor markets.
PEMEX reported a 21% reduction in its financial debt, compared to the end of 2024, as of June 2026. It now stands at US$ 77.50 billion. Sadly, all this reduction comes from government support, and not from the firm's own revenue and efficiency. The report does not mention PEMEX's debt to contractors and suppliers, which stands at US$ 21 billion.
By the end of September, the net fiscal loss from subsidies to fuel prices has been a little more than MXN$ 108 billion.
Inflation picked up speed again in October's first half, to an annual 3.62%. The main drivers were some vegetables, electricity (18.51%), and air travel (14.77%). The core component also accelerated, to 3.78%.
Foreign trade and relations, US–Mexico and USMCA
President Trump said the US and Mexico are close to an agreement on USMCA which would reduce the American deficit to zero, but as usual gave no details.
President Sheinbaum said that Trump is pressuring Mexico to import more natural gas from the US. The problem, though, is that Mexico is already too dependent on it.
Mexico cancelled more than one thousand registers of Asian suppliers of steel, after they failed to prove the existence of facilities. Secretary of Economy Ebrard insisted Mexico is not a platform for re-exportation of imported Asian steel.
Politics and social issues
Severe corruption by Guadalupe Taddei, chairwoman of INE, the elections agency, has surfaced. Multiple pieces of evidence of abuse of power, crooked contracts, nepotism, fake businesses, and cronyism with suppliers have escalated to President Sheinbaum, who demanded an audit of the institute. INE, an autonomous institution since 1996, had been one of the most respected elections agencies in the world, even sending missions to Iraq in its first postwar voting. Now, it has become an appendix of MORENA's governments. The largest federal elections will take place in eight months, with its autonomy and probity in question.
FGR (the federal prosecution agency) arrested César Jáuregui, state prosecutor of Chihuahua, on charges of treason. A few months ago, two CIA operatives died in an accident, after the dismantling of a large illegal drugs laboratory. It has turned out their participation was illegal and undisclosed, but the case is also tainted by the fact that MORENA's governments harshly prosecute cases involving opposition figures, but not their own people's (usually much more serious) crimes.
IMSS, the social security agency, suddenly modified the rules of "Mode 40", a legal method of voluntary contribution to the public pension fund allowing people to increase the amount to be received. The measure is clearly illegal, and it reveals the extent of the pension crisis, aggravated by the throwing away of huge amounts of money on vote-buying, useless and onerous public works, and corruption.
Technology, environment, health, industries and services
AT&T sold its Mexico operation to Televisa and Fintech Holdings, for US$ 2 billion, a reasonable price according to analysts. Televisa will now be second only to América Móvil (Telmex, Telcel, Claro), providing mobile services to a little over 25 million users, and fixed-service subscriptions to 5.8 million more. In the third quarter, AT&T's operating profit was 3.6%.
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