Mexico's central bank, Banco de México (Banxico), has sharply lowered its economic growth forecast for 2025 to 0.1%, down from 0.6% projected three months earlier. The forecast for 2026 was also reduced to 0.9% from 1.8%. Banxico governor Victoria Rodríguez Ceja cited a period of marked economic weakness and persistent uncertainty, particularly stemming from U.S. trade policy under President Trump and weaker domestic demand. The bank's latest monetary policy minutes highlight concerns about the impact of U.S. tariffs, currently at 145%, and commercial policy uncertainty on investment and external demand. The central bank noted that the Mexican economy is experiencing stagnation and may face a mild recession, with risks skewed to the downside. The range for expected GDP variation in 2025 is now set between -0.5% and 0.7%. The policy rate was recently cut by 50 basis points to 8.50%. Banxico indicated that further interest rate cuts of similar magnitude to those already implemented this year are possible, with private sector analysts expecting a 7% rate by year-end. Inflation was 4.2% in May, and Banxico continues to target 3% inflation by the third quarter of next year, though underlying inflation remains a concern. In March, Mexico's industrial production index fell to 108.3, a 2.0% decline from the previous month, marking the steepest drop in five months. Meanwhile, China's official manufacturing purchasing managers' index (PMI) for May rose to 49.5 from 49.0 in April, indicating a second consecutive month of contraction but at a slower rate. The non-manufacturing PMI was 50.3, and the composite PMI was 50.4. Among Chinese firms, large enterprises posted a PMI of 50.7, medium-sized 47.5, and small firms 49.3. The improvement is attributed in part to a temporary easing of trade tensions with the U.S., including a mutual reduction in additional tariffs, but the outlook remains cautious, with weak domestic demand and ongoing uncertainty in trade negotiations. China's new orders index was 49.8 and the production index was 50.7.