Mexico, Latin America’s second largest economy, is failing to take off. The country, in 2025, narrowly avoided the recession expected by the market. A small triumph which does not hide the whole perspective: the Mexican economy has grown very little for years and recovery is difficult in the face of a complex global environment and internal pressures which do not ease. A few days before the end of the year, the market estimates that gross domestic product (GDP) will stand at 0.4% once the 2025 accounts have been finalized and the statistics calculated. The figures are overwhelming and little by little the signs of stagnation are reflected in the streets.
The diagnosis made this week by the Economic Commission for Latin America and the Caribbean (ECLAC) on Mexico sums up the fundamental problem facing the country. Growth is so weak because of “weakening domestic demand, a result of lower remittances and lower consumption and private investment.” Centers for economic studies, financial institutions and expert economists are unanimous on the fact that there is a sinuous decline in investments – in September, gross fixed investments fell by 6.7% – and that it is necessary that the public and private sectors put all their efforts into restoring some dynamism to the Mexican economy. “(It is necessary) to foster confidence to increase private sector fixed investments and for the government to invest more,” says Gabriella Siller, director of economic studies at Grupo BASE, in an analysis.
The contraction of the economy during the third quarter of 2025 – during which a decline of 0.3% was observed – was assessed by Treasury Secretary Édgar Amador as a specific problem linked to the decline in industrial activities. “There is no prolonged weakness, it is targeted,” he said at the end of October. Furthermore, he stressed that by the end of the year, his team was considering a slight recovery linked to end-of-season expenses. During the same period, the services sector, which includes finance and trade, has kept the global indicator afloat, alongside rising wages and pensions that boost household consumption. Manufacturing and construction, on the contrary, hampered the result. The uncertainty generated by the commercial sector in the United States and the implementation of judicial reform in Mexico held back investors, but a scenario of strong exports and constant foreign investments also helped to maintain the environment.
A BBVA Research study on consumption carried out in November highlights that Mexican spending has stagnated, mainly in the goods and services sectors. “The data suggests a decline in household spending towards the end of the year, in an environment of prolonged uncertainty and weaker growth in real payroll. We expect that household consumption will show gradual improvements over the coming quarters, as the recovery in formal employment materializes,” emphasize the entity’s economists. For its part, Banamex warns that the increase in taxes and the imposition of customs duties on various Asian products could have an impact on inflation in early 2026.
Consumption before Christmas
At the beginning of December, the stores were not overflowing. The aisles of a Mexico City municipal market, stocked with fruit, flowers, decorations and pine trees, appeared half-empty, with some people inquiring about prices but few daring to buy. “Yes, it was quiet, but that’s normal for this date. Closer to Christmas, we hope it will be activated,” says José López, a seller, picking up a multi-colored piñata for a customer. He says that as the Buen Fin promotion season approaches, shoppers prefer department stores and malls. But in the huge stores nearby there are not many buyers either.
Mexico also shows signs of tension in indicators of unconventional consumption, linked to fashion, entertainment or social behaviors, which show signs of economic stagnation. They are neither official nor precise, but historically they leave clues to avoid stagnation, like those planned for the end of 2025. For the wallet, this translates into lukewarmness for discretionary consumption: preferring homemade recipes rather than eating in the street, leaving the most expensive treatments at the hairdresser for later or missing the next concert. Among these alternative indicators, the “lipstick index” is one of the best known. Coined by Leonard Lauder, then-chairman of personal care company Estée Lauder, during the 2008 financial crisis, the theory – still debated – holds that in tough times, shoppers postpone big expenses and trade them in for small, affordable luxury products, like cosmetics.
In this sense, figures from the Hot Sale, a mid-year discount event, highlight that conversions in the beauty category increased by 20% compared to 2024, while fashion purchases fell by 28%, according to the Mexican Online Sales Association (AMVO). And although the total amount of sales in 2025 increased by 23.7%, some indicators show downward latency: the average ticket has been halved in one year – around 1,100 pesos – and the number of buyers has also decreased, concentrating in socio-economic strata with greater purchasing power which, in general, are less tolerant of changes in consumption patterns.
Even the positive result of Buen End of 2025, with 78% of affiliated companies anticipating conversion increases of between 10% and 30%, according to the preliminary survey of the Confederation of National Chambers of Commerce, Services and Tourism (CONCANACO SERVYTUR), can offer a double reading: either consumers managed to maintain their purchasing power in a slower economic context, or they were waiting for this specific weekend to make postponed purchases. The second scenario would exercise caution at the point of sale, a space very likely to anticipate economic downturns.
The luxury of second-hand shopping
In the midst of this readjustment process, preferences changed. Whether due to growing concern for the environment or a search for savings, second-hand shopping continues to grow in Mexico. The digital platform GoTrendier predicts that by the end of 2025, its sales volume will have tripled, compared to a 1.5 times acceleration recorded in 2024. The application, which has physical collection points, indicates that a used item of clothing is sold every 15 seconds in the country. Another alternative indicator of the associated slowdown lies in the substitution of premium consumption with less expensive alternatives, such as fast fashion. And in this section, GoTrendier indicates that the platform’s favorite brands are Zara, the super fast mode Shein and H&M.
A salesman in one of the many stores savings of La Condesa, an upper-middle-class neighborhood known for its tourism, culinary and fashion scene, confirms the trends. “From September to November, there was a very strong rebound,” he says, consulting the calendar on his computer in the small men’s boutique. The average daily sale is around 25,000 pesos with items close to 2,000 pesos. “We don’t have overly expensive items, although we are not the tianguis or the paca either. The truth is that 70% of our sales depend on foreigners, even those who are already neighbors,” he says, asking to reserve his name.
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