MEXICO – Better-than-expected trade balance in October

October’s trade balance revealed a goods surplus of USD 606.1 million, exceeding  Bloomberg’s market consensus of a USD 588.5 mm deficit and improving upon October 2024’s deficit of USD 211.3 mm. On a 12-month rolling basis, the goods trade deficit fell to USD 1.2 billion, from a USD 2.0 bn deficit in September. However, at the margin, using three-month annualized seasonally adjusted figures, the trade balance showed some deterioration, now indicating a deficit of USD 500 mm (down from a USD 100 mm surplus in September). Examining the breakdown on a 12-month rolling basis, the oil trade balance continued to show a deficit (USD 23.8 bn deficit compared to a USD 22.6 bn surplus for non-oil), following the decline in domestic oil production and the government's strategy to prioritize domestic oil refineries. Manufacturing exports continue to be the highlight of the year, while capital goods imports remain flat, leaving investments adjustment yet to materialize. 

Our view: The better-than-expected trade balance in October followed a series of strong external data. Today’s release showed exports increasing at the margin, especially in the non-auto manufacturing sector. Net exports are an important driver of economic growth in 3Q25, though less so than in 1Q25. Uncertainty surrounding Mexico’s trade relationship with the US will continue to challenge trade flows until a definitive USMCA renegotiation begins before July 1, 2026. Looking ahead, oil exports will be influenced by domestic policies related to national sovereignty and oil price dynamics, while manufacturing exports are expected to remain at high levels.

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