By The Rio Times | Created at 2026-09-22 10:36:52 | Updated at 2026-09-22 13:25:59
3 hours ago
Mexico · Economy
Key Facts
- —What happened Mexico’s G20 growth ranking: second-fastest in the second quarter of 2026, behind only India, says the OECD.
- —The numbers Output rose 1.4% on the previous quarter after a 0.3% contraction in the first quarter, the OECD said.
- —Why it matters now Banxico, the central bank, decides on interest rates on Thursday 24 September 2026, eight days after a US rate hike.
- —What Barclays expects The British bank expects Banxico to hold its rate at 6.50% at each remaining meeting of 2026.
- —The catch Keeping diesel at 27 pesos a litre (about US$1.57) costs 163 million pesos a day (about US$9.5 million), one analyst estimates.
- —The official view President Claudia Sheinbaum said on 21 September 2026 that growth would improve in the third and fourth quarters.
Mexico’s economy bounced back between April and June faster than almost any big economy. The harder part starts now, with higher US interest rates and an expensive fuel price cap.
One-stop reference
Company Intelligence
Every listed company in Latin America — financials, ownership and structure for 1,450+ companies across 26 exchanges, in one place.
Mexico’s G20 growth ranking has gone from contraction to near the top in three months. Between April and June, only India grew faster among the Group of 20 (G20), the forum of the world’s major economies.
The ranking comes from the Organisation for Economic Co-operation and Development (OECD), the Paris-based club of mostly rich economies. Mexico’s output rose 1.4% on the previous quarter, twice the G20 average of 0.7%.
The good news lands in an awkward week. Mexico’s central bank sets interest rates on Thursday, days after the United States raised its own.
From contraction to second place
The OECD published the provisional figures behind Mexico’s G20 growth ranking on Monday 14 September 2026. It said G20 growth slowed slightly, from 0.8% in the first quarter to 0.7% in the second.
India led with 1.8%. Mexico followed at 1.4%, ahead of Indonesia at 1.3%, Turkey at 1.1% and China at 0.9%.
The United States grew 0.4% and Canada 0.8%, making Mexico the fastest of the three North American trade partners. Brazil, Latin America’s largest economy, grew 0.5%.
The jump follows a weak start to the year. The OECD records a 0.3% contraction for Mexico in the first three months of 2026.
Saudi Arabia dragged the group down. Its output shrank 4.8% in the quarter, which El Financiero, a Mexican business daily, linked to lower oil activity.
The president takes a victory lap
President Claudia Sheinbaum highlighted the ranking at her morning press conference on Monday 21 September 2026. “Second place in economic growth in the second quarter of 2026,” she said, according to Animal Político, a Mexican news site.
She added that the economy would do better in the third and fourth quarters.
The underlying data come from INEGI, Mexico’s national statistics institute. In August 2026 it revised quarterly growth down to 1.4%, from an early estimate of 1.5%.
That made it the best quarter since early 2022, according to El CEO, a business news site. Services, more than 60% of output, got a lift from World Cup spending.
Year on year, the economy grew 1.9% in the second quarter. In the first half it grew 1.2%.
The finance ministry cut its 2026 growth forecast on 8 September 2026. It now expects 1% to 2%, down from 1.8% to 2.8% in April.
Private analysts and international bodies expect growth of 1.1% to 1.5% this year, El CEO reported, near the middle of that range.
A Fed hike tests Banxico
The Federal Reserve, the US central bank, raised its benchmark rate by a quarter point on Wednesday 16 September 2026. The new range is 3.75% to 4%.
It was the first Fed increase since July 2023, Bloomberg reported. Most Fed officials projected another hike before the end of the year.
That matters for Mexico because investors compare returns on Mexican and US bonds. A narrower gap can weaken the peso and push up import prices.
The Bank of Mexico, known as Banxico, has held its rate at 6.50% since May. Its next decisions fall on 24 September, 5 November and 17 December 2026.
Barclays, the British bank, expects Banxico to hold at all three meetings. El Economista, a Mexican business daily, reported the forecast on 22 September 2026.
Latin American central banks now follow the Fed less closely than before the pandemic, Barclays argues.
The bank still names a limit: Banxico would have to follow if Fed hikes topped half a point within 18 months. Barclays does not expect that.
Barclays also forecasts that Mexican inflation will rise to 4% by the end of 2026, from 3.26% in August. It sees 4.5% by mid-2027, mainly from El Niño’s effect on food prices.
The diesel cap bill
The second pressure is fiscal. Mexico caps diesel at 27 pesos a litre (about US$1.57) through a voluntary pact between the government and fuel retailers.
To hold that line, the finance ministry waived the whole excise tax on diesel for 19 to 25 September 2026. That tax, called IEPS, is 7.36 pesos a litre (about US$0.43).
The ministry added a further stimulus of 1.83 pesos a litre (about US$0.11), Expansión reported.
Energy specialist Ramsés Pech puts the current cost of the cap at 163 million pesos a day (about US$9.5 million). He was quoted by El Economista on 21 September 2026.
His worst case assumes supply disruption in the Middle East and Ukraine. The cost would then reach 308 million pesos a day (about US$17.9 million).
Pech calls the frozen price “a silent fiscal bomb”.
His central scenario, assuming today’s market holds, puts the daily cost at 236 million pesos (about US$13.7 million). Those are one analyst’s estimates, not official figures.
Dollar conversions in this article use a rate of 17.2 to the US dollar, near Banxico’s reference rate on 21 September 2026.
What it means for outsiders
For foreign investors, Mexico’s G20 growth ranking is a useful rebound signal, not yet a trend. One strong quarter followed a contraction.
For companies and visitors, the practical questions are the peso and prices. Thursday’s Banxico decision will show how much room the central bank believes it still has.
More: Mexico coverage, every day from The Rio Times.
Frequently Asked Questions
Was Mexico really the second-fastest-growing G20 economy?
Yes, on a quarter-on-quarter basis in the second quarter of 2026. The OECD’s provisional figures, published on 14 September 2026, show Mexico’s output rising 1.4% from the first quarter. Only India grew faster, at 1.8%. On a year-on-year basis Mexico’s growth was a more modest 1.9%, according to INEGI, the national statistics institute.
Why does a US rate hike matter to Mexico?
Investors weigh returns on Mexican assets against US ones. When the Federal Reserve raises rates, the gap narrows unless the Bank of Mexico follows. A narrower gap can weaken the peso and raise import prices. Barclays expects Banxico to keep its rate at 6.50% for the rest of 2026 unless the Fed raises rates by more than half a point.
How much does Mexico’s diesel price cap cost?
The finance ministry publishes the per-litre tax relief each week. For the total daily cost, energy specialist Ramsés Pech, quoted by El Economista, estimates the current cost at 163 million pesos a day (about US$9.5 million). In his worst-case scenario it would rise to 308 million pesos a day (about US$17.9 million). The finance ministry has waived the whole excise tax on diesel for 19 to 25 September 2026.
When is the next Banxico decision?
The Bank of Mexico announces its next interest rate decision on Thursday 24 September 2026. Its remaining 2026 decisions are scheduled for 5 November and 17 December. The benchmark rate has been 6.50% since May.
Sources: OECD release on G20 growth in the second quarter of 2026, El Financiero on the OECD ranking, El Economista on Sheinbaum and the OECD figures, Animal Político on the president’s remarks, El CEO on INEGI’s revised GDP figures, Bloomberg Línea on the finance ministry’s revised forecast, Bloomberg via El Financiero on the Federal Reserve decision, El Economista on the Barclays forecast, El Economista on the cost of the diesel cap, Expansión on the weekly fuel tax relief, Sociedad Noticias on the peso and the Banxico calendar
