Providing broad insight into the Mexican economy
MND Intelligence · Fourth edition
Welcome to the fourth edition of the MND Economy Index™, part of the MND Intelligence™ suite of data products from Mexico News Daily.
The MND Economy Index™ is a 10-pillar, 19-indicator composite index that compiles a broad range of economic data into a single score between 0 and 100, giving Mexico News Daily readers a clear, accessible picture of how the Mexican economy is performing across multiple dimensions.
In the inaugural MND Economy Index™ article, published in late May, we not only analyzed the index score — 63.4 out of 100 — but also explained what the index is, why we developed it and how it works. Click here to read (or re-read) those explanations.
In this August edition of the MND Economy Index™ — which uses economic data primarily from the month of June — the index score is 66.9, a decrease of 1.7 points compared to the previous score.
The score for June is above the neutral benchmark of 60, but there is still significant room for improvement.
Before we look more closely at the latest index result, and the index trend in the first half of 2026, here is a short guide to what the overall index score means.
- 85–100: Exceptional — the economy performing at a high level across nearly all indicators.
- 75–84: Strong — broad-based performance with only minor areas of concern.
- 60–74: Above neutral — meaningful strengths, but with notable room for improvement.
- 50–59: Mixed — passing marks overall, more indicators above benchmark than below.
- Below 50: Broad underperformance — more indicators below benchmark than above.
The MND Economy Index™ trend between February and June
The first two MND Economy Index™ scores we calculated for 2026 — both corresponding to the first quarter of the year — were very similar.
The first index score we calculated for 2026 was 63.7, a number derived mainly from economic data for the month of February. The index score declined slightly to 63.4 based on a calculation using data that was primarily for the month of March.
While there was little variation in the index score across those two editions, there were some significant changes in individual pillar scores, including the inflation one and the sovereign risk one (see more details here).
In April, we saw the first significant movement of the year in the overall MND Economy Index™ score. In the space of a month, the score rose 4.16 points to 67.55, a clear indication that the Mexican economy was gaining strength. What was particularly encouraging was that the biggest contributor to the increase was the economic growth pillar, as the Mexican economy expanded 2.2% in April compared to just 0.5% in May.
While economic growth moderated to 2% in May, there were encouraging signs in other data related to the Mexican economy for that month, allowing the MND Economy Index™ score to increase for a second consecutive month to reach 68.6.
In June, the MND Economy Index™ declined for the first time since March. Among the reasons why the index score fell in June compared to May were lower annual economic growth and a year-over-year contraction in manufacturing output.
The August edition of the MND Economy Index™ (based mainly on June data)
As noted above, the MND Economy Index™ score for this August edition — based mainly on data for June 2026 — is 66.9, a decrease of 1.7 percentage points compared to the previous score. Below you will see the score for each of the ten pillars that make up the index, expressed out of 10 to reflect each pillar’s exact contribution to the final composite score.
Pillars are color-coded using a traffic light system: green (a score above 7.5) indicates strong performance; yellow (5.0–7.5) signals decent performance but with room for improvement; and red (below 5.0) flags a pillar that is falling short of its benchmark. Where a pillar score has improved compared to the previous month, an upward arrow appears alongside its corresponding traffic light; a downward arrow indicates deterioration; and a pause symbol denotes no change.
As you’ll see below, scores for five of the ten MND Economy Index™ pillars decreased in June compared to the previous month. Scores for four pillars increased while one stayed the same.
🟢 ⬇️ MONETARY POLICY (9.57):
The score for this pillar declined to 9.57 in June from 9.86 in May. The Bank of Mexico’s benchmark interest rate remained at 6.50% in June after a 25-basis-point cut to that level took effect on May 8. Therefore, there was no change in the interest rate component of the pillar score.
The deterioration in the pillar score was due to an increase in Mexico’s real interest rate in June — i.e., the Bank of Mexico’s benchmark interest rate minus the annual headline inflation rate. The real interest rate in June was 3.13%, a reading 0.43 points above the 2.7% neutral midpoint. The real interest rate in May, at 2.56%, was closer to the neutral midpoint than the reading in June.
Despite the decline in the monetary policy score, this pillar remained the index’s top performer in June 2026.
🟢 ⬆️ INFLATION (9.33):
The score for this pillar increased to 9.33 in June from 9.06 in May.
Inflation eased to 3.37% in June from 3.94% in May, causing an increase in the score for the current inflation component of the pillar.
The score for the pillar component that considers the 12-month forward inflation forecast declined as the Bank of Mexico now anticipates an annual rate of 3.3% in the second quarter of 2027, which, of course, includes the month of June. The central bank previously predicted an inflation rate of 3% in the second quarter of next year.
The increase in the inflation component score was greater than the decrease in the inflation forecast score, allowing the overall pillar score to rise.
The inflation pillar score is poised to improve again in the next edition of the MND Economy Index™ as inflation fell again in July, settling at 3.12%. In addition, the Bank of Mexico is currently forecasting an annual inflation rate of 3.2% in the third quarter of 2027. Therefore, the score for that component of the pillar should increase slightly in our next index.
🟡 ⬇️ SOVEREIGN RISK (7.43)
The score for this pillar was 7.43 in June, down slightly from 7.45 in May.
The score for the sovereign credit ratings component of the pillar remained unchanged in June, as there were no month-over-month changes to the Mexico ratings of Moodys (Baa3/stable); S&P (BBB/negative); and Fitch (BBB-/stable).
The slight decline in the overall pillar score was due to a modest widening in Mexico’s 5-year credit default swap spread. The credit default swap spread was 86.87 basis points at the end of June, up from 86.03 basis points at the end of May. The increase reflected a slight rise in the market-implied cost of insuring against a Mexican sovereign default.
🟡 ⬇️ MANUFACTURING SECTOR HEALTH (6.9)
The score for this pillar declined in June, falling to 6.9 from 7.48 in May.
The exports component of the pillar remained at the maximum score due to a 34.4% annual increase in export revenue in June, well above the 16.7% threshold needed for a perfect ten. Official data shows that 91.3% of Mexico’s export revenue between January and June came from the shipment abroad of manufactured goods.
The decrease in the overall pillar score was due to a 2.4% annual contraction in manufacturing output in June. Manufacturing output also declined in annual terms in May, but the contraction that month was much smaller at 0.1%.
🟡 ⬆️ CURRENCY STABILITY: (6.8)
The score for this pillar rose to 6.8 in June from 6.77 in May.
The standard deviation of daily exchange rate movements increased to 0.49% in June from 0.42% in May, leading to a slight decrease in the score for that component of the pillar.
The increase in the pillar score in June was due to a higher spot rate score. The score for that component increased because the peso weakened against the US dollar in June to trade at 17.50 to the greenback at the end of the month, a depreciation of 0.7% compared to the end of April.
The exchange rate was thus closer to the index’s 19.00 USD:MXN baseline, which is based on the 2025 average rate. This pillar penalizes significant deviation from the 19.00 USD:MXN baseline in either direction, recognizing that a peso that has strengthened too far from this benchmark can erode export competitiveness and reduce the purchasing power of remittances, just as a weakening peso raises import costs.
🟡 ⬇️ INVESTMENT CLIMATE (6.56)
The score for this pillar fell to 6.56 in June from 8.25 in May.
In part, the decline was due to lower — but still strong — annual growth on the S&P/BMV FIBRAS Total Return Index, which tracks the performance of Mexico’s listed real estate investment trusts. The index grew 27.1% annually to the end of June.
The score for the foreign direct investment component of the pillar also declined as the Economy Ministry published data this week showing that foreign direct investment in Mexico increased 2.1% annually in the first six months of 2026. That result is significantly weaker than the 10.4% year-over-year growth recorded in the first quarter of the year.
🟡 ⬆️ EXTERNAL INCOME (6.52)
The score for this pillar increased in June, rising to 6.52 from 5.53 a month earlier.
Incoming remittances grew 4.2% year-on-year — an increase compared to the 3.8% increase in May.
Thus, the score for the remittances component of the pillar increased. However, the 4.2% annual growth rate is still well below the 16.67% increase required for a perfect score.
The pillar score also improved in June as tourism revenue increased 5.9% annually, a welcome development after a 0.3% year-over-year contraction in May.
🟡 ⬆️ LABOR AND EMPLOYMENT (6.21):
The score for this pillar increased to 6.21 in June from 6.02 in May. Scores for two of the three pillar components increased, allowing the overall score to edge up.
In June, there was a 2% annual increase in the number of people in formal sector jobs, up from a 1.5% increase in May. Therefore, there was an increase in the score for that component of the pillar.
Nominal wages rose 6.4% year-on-year in June — down slightly from 6.6% in May, but still well above the 3.5% benchmark.
Year-over-year growth in Mexico’s informality rate was only 0.2 percentage points in May, down from an annual increase of 0.3 points in May. In June, 55% of all Mexican workers worked in the informal economy. Lowering that rate is a major challenge for the Mexican government.
🔴 ⬇️ ECONOMIC GROWTH (4.4)
The score for this pillar fell to 4.4 in June from 5 in May.
The decrease was due to a lower annual economic growth rate in June. The annual growth rate in June was 1.7%, according to final data published by INEGI this week, whereas the rate in May was slightly higher at 2%.
While Economic Growth remains one of the index’s worst-performing pillars, the performance of the Mexican economy did improve in the second quarter of 2026 compared to the first quarter. INEGI reported this week that the economy grew 1.4% on a quarter-over-quarter basis between April and June, while the annual expansion was 1.9%. The economy contracted 0.3% in the first quarter of 2026 compared to the previous two months, while annual growth was just 0.4% in that period.
🔴 ⏸️ PRODUCTIVITY (3.2):
The score for this pillar remained at 3.2 in May after plummeting to that level in April from an already low 4.8 in March.
Data published by the national statistics agency INEGI in June showed that the IGPLE — INEGI’s quarterly productivity measure — increased only 0.1% annually in the first quarter of 2026. That level of productivity growth was significantly weaker than the 0.9% reading in the final quarter of 2025.
An annual productivity growth rate of 0.1% is well below the 1.0% neutral benchmark, and thus, the score for this pillar is very low.
INEGI will publish productivity data for the second quarter of 2026 in early September. We will use that data for the next edition of the MND Economy Index™.
Mexico News Daily
