Mexican economy: growth, inclusion and poverty reduction
Over the last three decades, the Mexican economy has underperformed in terms of growth, inclusion and poverty reduction compared to similar countries, according to the World Bank.
Mexico‘s economy had an estimated growth of just over 2.0% per year between 1980 and 2022, limiting progress in convergence relative to high-income economies.
After a drop of 8.0% in 2020 due to the Covid-19 pandemic and a rebound of 4.7% in 2021, the Mexican economy grew 3.1% in 2022.
The economy has recovered to pre-pandemic levels of employment and Gross Domestic Product (GDP).
The World Bank refers that Mexico’s stable macroeconomic framework, the dynamism of the United States and the solid manufacturing base will support economic growth.
The bank then makes this recommendation: to accelerate sustainable economic growth and poverty reduction in the medium term, Mexico must address structural constraints, such as limited access to finance, insecurity, informality, regulatory burdens and infrastructure bottlenecks.
According to the World Bank, addressing these challenges is critical to making the most of the relocation opportunity in today’s international environment.
With a population of nearly 130 million, a rich cultural history and great diversity, favorable geography and abundant natural resources, Mexico is among the 15 largest economies in the world and the second largest in Latin America.
The country has strong macroeconomic institutions, is open to trade and has a diversified manufacturing base connected to global value chains.
Mexico’s index of global economic activity (IGAE), the monthly indicator of GDP growth, increased 0.3% month-over-month in February, after growing 0.4% in January.
According to the Federal Reserve Bank of Dallas, the driver of this increase was the goods-producing sector (which includes manufacturing, construction and utilities), which rose 1.0% in both January and February.
Service-related activities (including trade and transportation) recorded no growth during the period.
Year over year, the IGAE rose 3.5% in February.
The three-month moving average of Mexico’s total exports fell 1.0% in February after rising 0.7% in January