Mexico's external accounts have shown sharp improvement across two separate reporting periods, according to data from the Bank of Mexico. In the second quarter of 2024, the current account balance swung to a surplus of $8,927 million, reversing a revised deficit of $15,878 million in the previous quarter and contrasting with a $3.2 billion deficit in Q2 2023. Bank of Mexico data separately showed that in Q2 2025, the current account deficit narrowed to 1.65% of GDP from a revised 3.14% of GDP in the first quarter.
The 2024 surplus was driven by a narrowing trade deficit and resilient remittance inflows. Exports in manufacturing and automotive sectors rebounded, while imports moderated amid softer domestic demand. Analysts attributed the shift to favorable exchange rate effects, improved terms of trade, and slower capital goods imports. The Q2 2024 surplus was the largest quarterly current account surplus in more than a decade. Historically, Mexico has run modest deficits funded by foreign investment; the last sustained surplus occurred during the 1995 peso crisis, but the 2024 surplus was viewed as a sign of economic resilience rather than distress.
In Q2 2025, the deficit narrowed primarily on a stronger trade balance and near-record remittances, which offset a modest widening in the income account deficit. Goods trade improved as manufactured and agricultural export growth outpaced imports. However, the remaining deficit indicated that Mexico still relies on foreign capital to fund domestic investment and consumption. Analysts noted the trend was positive but cautioned that global economic uncertainty, trade policy shifts, and commodity price volatility could affect future quarters.
Investor and policy implications: A current account surplus generally signals that a country is saving more than it invests, which can support the peso and reduce reliance on external borrowing. A smaller deficit similarly reduces external financing needs and supports macroeconomic stability. For policymakers, the data may provide room to manage fiscal and monetary policy without immediate external pressures. Risks include potential peso appreciation that could hurt export competitiveness over time.
