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Mexico Economic Data & Projections

Mexico Economic Outlook

Continental powerhouse:

Mexico is the second-largest economy in Latin America and the fourth-largest in the Americas, with a nominal GDP of over USD 1.5 trillion. Mexico is also the third most populous country in the Americas, after the U.S. and Brazil.

Manufacturing hub:

Manufacturing plays a major role in Mexico's economy, particularly in the automotive, electronics, and consumer goods sectors. The country has become a major base for companies looking to export to the United States and Canada, with Mexico benefiting from competitive labor costs and the USMCA free trade agreement with its two North American neighbors. In recent years, Mexico's manufacturing sector has gotten a boost from the pandemic, U.S.-China trade tensions, and U.S. financial incentives to produce key industrial goods in North America. All three factors are spurring nearshoring demand in Mexico, which in early 2023 became the U.S.' top trading partner ahead of Canada and China.

Energy and Natural Resources:

Mexico is rich in natural resources, including petroleum, silver, copper, gold, lead, zinc and natural gas. The oil sector, dominated by state-owned company Pemex, is crucial for government revenues, although production has been declining in recent years. Under President López Obrador, the government has attempted to limit the private sector's involvement in the energy sector, stifling private investment.

Challenges:

Mexico faces several economic challenges, including gaping income inequality, underemployment, a large informal sector and shaky infrastructure. The country also contends with issues related to drug-related violence and corruption, which have an impact on its investment climate. In addition, in recent years, the MORENA-led administration has adopted an ambivalent attitude towards private business, particularly in the energy and natural resources sector of the economy. Donald Trump’s second term as U.S. president is an extra source of uncertainty: Trump has threatened higher tariffs on Mexico, which could cripple Mexico’s economy; 80% of Mexican exports are to the U.S.

Mexico's economic outlook:

Mexico's economy outperformed the Latin America average from 2022 to 2024, and is likely to continue to do so in the short to medium term due to uncertainty over U.S. trade policy plus a tighter fiscal stance in the wake of the 2024 general elections.

Mexico's Macroeconomic Analysis:

Nominal GDP of USD 1,795 billion in 2023.

GDP per capita of USD 13,688 compared to the global average of USD 10,589.

Average real GDP growth of 1.5% over the last decade.

Share of the region's population
Share of the region's GDP

Sector Analysis

In 2021, services accounted for 64% of overall GDP, manufacturing 18%, other industrial activity 14%, and agriculture 4%. Looking at GDP by expenditure, private consumption accounted for 65% of GDP in 2021, government consumption 12%, fixed investment 20%, and net exports 3%.

GDP by economic sector
GDP by type of expenditure

International trade

In 2021, manufactured products made up 77% of total merchandise exports, mineral fuels 6%, food 9%, ores and metals 2% and agricultural raw materials 0%, with other categories accounting for 6% of the total. In the same period, manufactured products made up 74% of total merchandise imports, mineral fuels 8%, food 6%, ores and metals 3% and agricultural raw materials 1%, with other goods accounting for 8% of the total. Total exports were worth USD 578 billion in 2022, while total imports were USD 605 billion.

Key exports
Key imports
Key export partners
Key import partners

Main Economic Indicators

Economic growth

The economy recorded average annual growth of 1.5% in the decade to 2024. The economy benefited from its proximity to the United States but faced headwinds from fluctuating oil prices and an ambivalent stance towards the private sector under President Obrador. Post-pandemic the economy has benefitted from a recovery in tourism, strong remittances and exports, and state investment in large infrastructure projects such as the Maya Train and a new airport. To read more about GDP growth in Mexico, go to our dedicated page.

Fiscal policy

Mexico's fiscal deficit averaged 2.5% of GDP in the decade to 2023. This reflected cautious fiscal policy under President López Obrador. However, the deficit widened markedly in 2023 due to pre-election spending. Find out more on our dedicated page.

Unemployment

The unemployment rate averaged 3.7% in the decade to 2024. The unemployment has generally been on a downward trend, and reached the lowest rate since the early 2000s at the end of 2023. For more information on Mexico's unemployment click here.

Inflation

Inflation averaged 4.7% in the decade to 2024. The country faced several economic challenges, including currency fluctuations, changes in fiscal policies, and external economic shocks. The COVID-19 pandemic temporarily increased inflation, but the Bank of Mexico's monetary policy tightening helped stabilize it towards the end of 2022. Go to our Mexico inflation page for extra insight.

Monetary Policy

Mexico's monetary policy rate ended 2024 at 10.00%, up from 3.00% a decade earlier. Initially, rates were increased to control inflation, but were cut to stimulate growth during economic slowdowns, particularly during the COVID-19 pandemic. Post-pandemic, the focus shifted to controlling rising inflation, leading to increased rates. See our Mexico monetary policy page for additional details.

Exchange Rate

From end-2014 to end-2024 the peso weakened by 29.3% vs the U.S. dollar.However, the currency strengthened post-pandemic, thanks to Banxico's double-digit policy rate, and strong inflows of tourists, remittances and export revenue. For more info on the peso, click here.

Economic situation in Mexico

The economy grew 1.1% on a seasonally adjusted quarter-on-quarter basis in Q3, the strongest rate in over two years and up from Q2’s 0.4% expansion. The agricultural, manufacturing, mining, real estate, retail and wholesale, and transport subsectors all accelerated in the third quarter. In Q4, our Consensus is for the economy to have slowed to a more sustainable pace of growth, and this is backed up by available data. Economic activity fell by 0.7% month on month in October, the worst performance since January, due to declines in the agricultural and industrial sectors. In other news, recent weeks, the government has cracked down on migration and drug trafficking and announced measures to reduce Mexico’s trade deficit with China. These steps are a bid to appease U.S. President Trump, who has threatened to impose a 25% tariff on all Mexican imports.

Mexico Economic Forecasts

Projections out to 2034.

58 indicators covered including both annual and quarterly frequencies.

Consensus Forecasts based on a panel of 53 expert analysts.

Want to get insight on the economic outlook for Mexico in the coming years? FocusEconomics collects projections out to 2034 on 58 economic indicators for Mexico from a panel of 53 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Mexico economy. To download a sample report on the Mexico's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.

Mexico Economic Indicators

2019 2020 2021 2022 2023
Exchange Rate (MXN per USD, eop) 18.88 19.93 20.47 19.49 16.93
Exchange Rate (MXN per USD, aop) 19.25 21.49 20.29 20.12 17.75
Unemployment (% of active population, eop) 2.9 3.8 3.5 2.8 2.6
Unemployment (% of active population, aop) 3.5 4.4 4.1 3.3 2.8
Banxico Target Rate (%, eop) 7.25 4.25 5.50 10.50 11.25
Inflation (CPI, ann. var. %, eop) 2.8 3.2 7.4 7.8 4.7
Government Consumption (ann. var. %) -1.8 -0.7 -0.5 2.0 1.8
Current Account Balance (USD bn) -3.9 26.9 -4.5 -17.6 -5.5
Current Account Balance (% of GDP) -0.3 2.4 -0.3 -1.2 -0.3
Inflation (CPI, ann. var. %, aop) 3.6 3.4 5.7 7.9 5.5
Private Consumption (ann. var. %) 0.9 -10.0 8.6 4.8 4.2
External Debt (USD bn) 622 629 602 583 594
External Debt (% of GDP) 47.6 56.1 45.8 39.7 33.1
Merchandise Exports (ann. var. %) 2.2 -9.4 18.6 16.7 2.6
GDP per capita (USD) 10,257 8,741 10,199 11,288 13,688
Domestic Demand (ann. var. %) -0.6 -10.4 7.8 5.1 6.6
GDP (USD bn) 1,305 1,121 1,316 1,467 1,795
10-Year Bond Yield (%, eop) 6.86 5.47 7.55 9.04 8.97
Fiscal Balance (% of GDP) -1.6 -2.8 -2.8 -3.2 -3.3
Merchandise Exports (USD bn) 461 417 495 578 593
Economic Growth (GDP, ann. var. %) -0.4 -8.4 6.0 3.7 3.3
Exports (G&S, ann. var. %) 1.3 -7.2 7.3 9.6 -7.2
Imports (G&S, ann. var. %) -1.0 -12.3 16.2 8.6 3.7
GDP (MXN bn) 25,122 24,087 26,690 29,516 31,856
Economic Growth (Nominal GDP, ann. var. %) 3.9 -4.1 10.8 10.6 7.9
International Reserves (months of imports) 4.8 6.1 4.8 4.0 4.3
Merchandise Imports (ann. var. %) -2.0 -15.9 32.0 19.6 -1.0
Merchandise Imports (USD bn) 455 383 506 605 598
Fixed Investment (ann. var. %) -4.4 -17.3 10.5 7.4 16.6
Industrial Production (ann. var. %) -1.7 -8.8 6.4 4.8 3.4
International Reserves (USD bn) 181 196 202 199 213
Retail Sales (ann. var. %) 2.2 -8.7 13.3 7.2 4.0
Population (million) 127 128 129 130 131
Remittances (USD bn) 37.3 41.7 52.5 58.9 63.3
TIIE 28 Days Rate (%, eop) 7.56 4.48 5.72 10.76 11.50
Public Debt (% of GDP) 45.5 51.7 50.5 48.2 47.4
Merchandise Trade Balance (USD bn) 5.4 34.2 -10.8 -26.9 -5.5
Foreign Direct Investment (USD bn) 3.5 2.8 3.4 3.6 3.6

Q&A:

  1. How is the economy in Mexico currently?

  2. Mexico's economy is currently strengthening following a Covid-19-induced slowdown. GDP growth is supported by a rebound in domestic demand, a recovery in the services sector, and continued manufacturing sector growth. However, the economy still faces challenges such as income inequality and ongoing insecurity.

  3. Is Mexico's economy bigger than Spain's?

  4. Mexico's economy, measured by nominal GDP, is larger than Spain's, though not by much. Moreover, given Mexico's far higher population—around 130 million compared to 48 million for Spain—Spain has a far higher GDP per capita.

  5. What is Mexico's main economic sector?

  6. The services sector is the largest in Mexico and contributes to over half of the country's GDP.

  7. What is the outlook for the Mexican economy?

  8. The Mexican economy is expected to grow ahead, fueled by strong domestic demand amid nearshoring investment. However, challenges like poor infrastructure, income inequality, and security issues will persist.

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Interested in Mexico economic reports, analysis and data? FocusEconomics provides data, forecasts and analysis for hundreds of countries and commodities. Request your free sample report now.

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