Mexico’s economic activity is estimated to have grown 1.7 per cent year-on-year in June, according to the national statistics institute’s timely indicator, a figure that would lift second-quarter expansion to around 1.8 per cent. That marks a sharp acceleration from the 0.4 per cent annual rate recorded in the first three months of the year, when the economy flirted with stall speed. The services sector, which accounts for roughly two-thirds of output, remained the main engine, expanding 2.2 per cent, while industrial activity returned to positive territory at 0.5 per cent, helped by construction. Analysts in Mexico City caution that the upturn is more a rebound from a weak start than the beginning of a sustained upswing, with the first-half average still a modest 1.1 per cent.

Viewed from Buenos Aires, the picture is one of a recovery that refuses to broaden. Argentina’s monthly economic activity index fell 0.5 per cent in May from April, its second consecutive monthly decline, and grew just 0.2 per cent from a year earlier. The result undershot market expectations of a 2.3 per cent rise and exposed a deepening divide: agriculture, mining and energy posted strong gains, with the farm sector up 4.6 per cent and mining surging 15.7 per cent, while manufacturing contracted 5.6 per cent and commerce fell 4.3 per cent. The two export-oriented sectors together contributed 1.2 percentage points to the annual figure, almost entirely offset by the drag from industry and trade. Economists in the capital note that the pattern of a “serrucho”—a sawtooth of alternating monthly gains and losses—has persisted for three years, with job-rich domestic sectors unable to find traction.

Structural headwinds are also clouding Mexico’s medium-term outlook. The Institute of International Finance warned this week that policy uncertainty—particularly around the T-MEC trade pact review, a weakened investment climate and institutional erosion—is subtracting at least half a percentage point from annual GDP growth. It forecasts expansions of just 0.9 per cent in 2026 and 1.1 per cent in 2027, well below the country’s twenty-year average, and sees foreign direct investment moderating to 2–2.5 per cent of GDP. The institute argues that without a credible improvement in the business environment, Mexico risks missing the nearshoring opportunity and slipping back into its pre-pandemic stagnation.

For both economies, the second half of the year hinges on whether tentative tailwinds can overcome structural drags. In Mexico, the central bank’s rate-cutting cycle and easing inflation may offer some support to consumption, but private investment remains constrained by the unresolved trade review. Argentina’s government is betting that disinflation and a gradual relaxation of financial conditions will eventually revive domestic demand, though the latest data suggest that transmission remains broken. The next factual milestones are the release of Mexico’s final June IGAE print and the start of formal T-MEC revision talks, both of which will test the durability of the nascent recovery.