Mexico’s current account deficit narrowed to 1.65% of gross domestic product in the second quarter of 2025 from a revised 3.14% in the first quarter, according to balance of payments data. The improvement was driven by a stronger goods trade balance, as manufactured and agricultural exports grew faster than imports, and by remittances that remained near record levels. Those gains offset a modest widening in the income account deficit. The smaller deficit reduces Mexico’s external financing needs, may support the peso and signals stronger competitiveness in key export sectors, but it also shows that the country still relies on foreign capital to fund domestic investment and consumption. Analysts view the trend as positive while warning that trade-policy changes, global demand and commodity-price volatility could affect future quarters. The data may support Mexico’s macroeconomic stability, sovereign credit outlook and ability to attract foreign direct investment, while giving policymakers more room to manage fiscal and monetary policy. Banco de México is likely to view the result as consistent with its inflation and growth objectives.