Economic Overview

For the latest updates top top the vital economic responses from federal governments to resolve the economic affect of the COVID-19 pandemic, you re welcome consult the IMF"s plan tracking platform plan Responses to COVID-19.

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Mexico is among the world"s 15 biggest economies and also is the second largest economy in Latin America. The nation is very dependent top top the joined States, its largest trading partner and destination of almost 80% of its exports. According to the IMF, GDP contracted by an estimated -8.2% in 2020, due to the outbreak of COVID-19. However, the nation is intended to recoup in the coming years, as the IMF"s April 2021 forecast projects a growth of 5% for 2021 and 3% because that 2022, subject to post-pandemic an international economic recovery.

The country recorded a budget deficit that an estimated 2.8% in 2020, a price that must remain secure in 2021 and also decrease come 2.3% in 2022. Spending priorities encompass social programs, the creation of the national Guard come fight rising crime and brand-new funds to assistance PEMEX, whose rating was downgraded by Fitch as result of uncertainty roughly its future strategy and also financial stress. The sector is the pivotal prominence to the mexican economy, as oil production accounts for one third of the federal government revenues. The country’s debt-to-GDP ratio raised to 60.6% in 2020 and is meant to stay stable in the upcoming years. Inflation has actually been over target because 2017, however it slowed under to 3.4% in 2020. As result of lower fuel prices and the pandemic, inflation should reach 3.5% in 2021 and 3.1% in 2022, an increasing purchasing power and private consumption. Mexico"s economic recovery plan in solution to the economic situation resulting indigenous the COVID-19 pandemic has a USD 26 exchange rate stimulus parcel that has actually been heavily criticised for not being very detailed and being far smaller than the budget stimulus spreading in other emerging markets. Follow to the president, the money for the package come from reduced spending and also salary cut for high-level bureaucrats. Few of the measures imposed by the government (adding up to 2% that GDP) include higher health expenditure; anticipating pensions payment by 8 months; speeding up procurement processes and VAT refunds; loan to companies and workers in ~ a low rate; and providing liquidity support and also guarantees by advance banks.

Mexico"s joblessness rate boosted to 4.4% in 2020, mainly as result of the negative economic impact of the COVID-19 pandemic, and also it is supposed to slightly decrease come 3.6% in 2021. However, the informal ar is still approximated to involve approximately 60% of employed staff (OCSE). An essential challenges which stay to be tackled incorporate high dependency on the U.S. Economy, high and also rising criminality rates, revenue inequality, weakening infrastructure and education, and also decades the underinvestment in the oil sector.


Main Indicators201820192020 (e)2021 (e)2022 (e)GDP (billions USD)GDP (Constant Prices, annual % Change)GDP per Capita (USD)General federal government Balance (in % of GDP)General government Gross blame (in % of GDP)Inflation rate (%)Unemployment price (% of the work Force)Current Account (billions USD)Current Account (in % that GDP)
1.001.001.001.001.00
2.2-0.1-8.25.03.0
910899
-2.8-2.4-2.8-2.8-2.3
53.653.360.660.560.5
4.93.63.43.53.1
3.33.54.43.63.3
-25.42-4.2426.5721.6813.13
-2.1-0.32.51.81.0

Source: IMF – world Economic Outlook Database, April 2021

Note 1: (e) approximated Data


Main Sectors the Industry

Mexico"s economic situation is diversified, consisting of hi-tech industries, oil production, mineral exploitation, and also manufacturing. Follow to the latest data from the human being Bank, agriculture accounted because that 3.38% the Mexico’s GDP in 2019 and also employed 12.4% that the country’s active population in 2020. Mexico is the world"s seventh farming power and also ranks amongst the world"s biggest producers of coffee, sugar, corn, oranges, avocados and limes. Livestock farming and fishing are also important activities in the food industry. Mexico is also the world"s fifth largest producer of beer and also its largest exporter. Return the COVID-19 pandemic created far-ranging challenges, the farming sector has been just one of the much more privileged sectors in Mexico, as it wasn"t as deeply influenced as others and also even showed periods of little growth.

Industry employs 26.1% that the workforce and represents virtually 30.88% that GDP, according to the people Bank. Mexico is amongst the world"s top producers of plenty of minerals, consisting of silver, fluorite, zinc and also mercury. Moreover, oil and also gas reserves are among the country’s many precious possessions. The aerospace sector has grown sharply, many thanks to the breakthrough of a swarm in Queretaro and the existence of practically 190 companies, including Bombardier, Goodrich, the Safran group and also Honeywell, which with each other employ 30,000 people. Mexico is additionally one the the world"s ten largest vehicle producers and due to significant real heritage investments, the construction sector is dynamic. In 2020, however, the production sector was deeply impacted by the pandemic, specially the automotive, the textile, and the beverage industries.

The organization sector constitutes 59.87% the GDP and also employs 61.37% the the workforce. The hi-tech, information and also software advancement sectors room experiencing a real momentum, propelled by the quality of the workforce, clusters and also low operating expenses that favours the creation of speak to centres. Also though clinical services and also tourism had been growing steadily for the past couple of years, because of lower service costs than in other Western countries, 2020 experienced a significant decline in the tourism industry. Additionally, the IT sector was one of the worst fight by the pandemic, mainly because of a spicy drop in investment.


Breakdown of Economic task By SectorAgricultureIndustryServicesEmployment By sector (in % of full Employment)Value added (in % that GDP)Value added (Annual % Change)
12.525.562.0
3.929.660.0
1.9-10.0-7.7

Source: civilization Bank, 2017, Latest easily accessible data.


Find an ext information about your company sector on our business Market Reports.

Learn an ext about sector Analyses around Mexico top top Globaltrade.net, the directory for international Trade company Providers.


Definition:

The financial freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of financial freedom: dominion of regulation (property rights, flexibility from corruption); limited Government (fiscal freedom, government spending); Regulatory performance (business freedom, work freedom, financial freedom); and Open sectors (trade freedom, investment freedom, financial freedom). Each of the for free within these four large categories is individually score on a scale of 0 to 100. A country’s as whole economic freedom score is a basic average of its scores top top the 10 separation, personal, instance freedoms.


Score:64,7/100World Rank:66Regional Rank:12
*

Economic flexibility in the world (interactive map)Source: 2019 index of financial Freedom, heritage Foundation


Definition:

The company rankings model steps the quality or attractiveness the the organization environment in the 82 nations covered through The Economist intelligence Unit’s country Forecast reports. That examines ten different criteria or categories, spanning the politics environment, the macroeconomic environment, industry opportunities, plan towards complimentary enterprise and also competition, policy towards foreign investment, foreign trade and also exchange controls, taxes, financing, the labour market and infrastructure.


Score:6.36/10World Rank:43/82

Source: The Economist intelligence Unit - organization Environment Rankings 2020-2024


Sources of General financial Information

MinistriesMinistry of EconomyMinistry of international RelationsMinistry the WelfareMinistry of Finance and Public CreditMinistry that EnergyList of government agencies and also ministriesStatistical OfficeNational institute of Statistics and GeographyCentral BankBank the MexicoStock ExchangeMexican stock ExchangeOther advantageous ResourcesMinistry that WelfareNational academy of Statistics and GeographyProMexicoMain digital NewspapersEl FinancieroMexico News DailyEl EconomistaEl UniversalEl DebateEl DiarioEl MilenioEconomic PortalsTrade in Mexico


Political Outline

Current politics LeadersPresident: Andrés Manuel López Obrador (since 1 December 2018) - MORENAThere is no de facto vice president in Mexico. In case the chairman is unable to carry out his duties, congress names a substitute or Interim President. Till the nomination, the Secretary that the inner is the one who assumes executive powers provisionally.Next election DatesPresidential: July 2024Senate: July 2024 chamber of Deputies: July 2021Current politics ContextPresident Andrés Manuel López Obrador damaged a two-party hegemony that had lasted for years when he take it office in December 2018, capitalising on social discontent. López Obrador’s government asserted economic reforms together its priority, consisting of reforms the the legislation in the energy, financial, fiscal, and also telecommunications sectors; in addition to an overall objective the a an ext equitable revenue distribution. More recently, however, the mexican president has actually not provided a stimulus routine to support businesses and also the unemployment share that the population during the COVID-19 pandemic. The government has been encountering criticism because the outbreak of the worldwide pandemic, as component of the population maintains that Obrador’s administration has deliberately tried to hide the emergency that the situation throughout 2020. Mexico is the fourth most hit country in terms of a complete death toll induced by COVID-19.Main political PartiesMexico has a multi-party system. Under the transition to autonomous pluralism, the centre of political power has actually shifted away from the executive and towards the legislature branch and also local governments. The four largest political next in the country are: - nationwide Regeneration activity (MORENA): centre-left come left wing, society democratic, reformist party. MORENA formed a to win coalition together with the left-wing work Party and right-wing social Encounter Party (now dissolved) in the 2018 elections, v its candidate, Andrés Manuel López Obrador, being elected President.- Institutional Revolutionary Party (PRI): centre to centre-left, earliest political party in the country, constitutionalist, technocratic, social conservative, big tent party. PRI ruled for 7 consecutive decades, winning every presidential elections in between 1929 and also 1994. After losing the 2000 and also the 2006 elections, they went back to power in 2012, v the election of chairman Enrique Peña Nieto, however subsequently failed to success the 2018 elections.- National activity Party (PAN): centre-right to best wing, for free conservative, Christian democratic party.- Party of the Democratic change (PRD): centre-left come left wing, social democratic party.

Other parties include: the Citizens" Movement and also the Ecologist green Party the Mexico.Type the StateMexico"s main name is the united Mexican States. It is a commonwealth republic based upon presidential democracy.Executive PowerAs developed by the Constitution, the Executive power is headed by the chairman of the joined Mexican States. The president is both Head that State and Head of Government, and the supreme Commander the the military Force. The or she is chosen by popular vote for a 6 year term and cannot it is in reelected. The chairman appoints the Cabinet.Legislative PowerThe mexican legislative power is in the hand of the conference of the Union, i m sorry is split in 2 chambers: the room of Deputies and the Senate that the Republic. The room of Deputies has 500 members, 300 of i m sorry are elected through plurality voting and also 200 with proportional representation, v a three-year mandate. The Senate of the Republic is written by 128 members, 96 of which are chosen through plurality voting and 32 v proportional representation, all v a six-year mandate.
Definition:The world rankings, published annually, actions violations that press liberty worldwide. It shows the degree of freedom appreciated by journalists, the media and also digital citizens of each country and the method used by says to respect and uphold this freedom. Finally, a note and a place are assigned to every country. To compile this index, Reporters Without borders (RWB) ready a questionnaire combine the key criteria (44 in total) to assess the case of press flexibility in a provided country. This questionnaire was sent out to companion organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It contains every sort of direct attacks against journalists and also digital citizens (murders, imprisonment, assault, threats, etc.) or versus the media (censorship, confiscation, searches and harassment etc.).


World Rank:144/180

Source: 2019 human being Press flexibility Index, Reporters without Borders


Indicator of political Freedom


Definition
Definition:

The Indicator of Political freedom provides an annual evaluation that the state of liberty in a nation as competent by individuals. The inspection measures liberty according come two vast categories: politics rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, political Pluralism and also Participation, work of Government) and 15 civil liberties concerns (on flexibility of Expression, Belief, Associational and also Organizational Rights, ascendancy of Law, an individual Autonomy and also Individual Rights). Scores room awarded to every of these concerns on a scale of 0 to 4, whereby a score that 0 represents the the smallest degree and also 4 the greatest level of civil liberties or free present. The total score awarded come the political rights and also civil liberties checklist identify the political rights and civil liberties rating. Each rating the 1 through 7, through 1 representing the highest and 7 the lowest level the freedom, corresponds to a selection of total scores.

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Ranking:Partly FreePolitical Freedom:3/7Civil Liberties:3/7

Political flexibility in the human being (interactive map)Source: freedom in the human being 2019, flexibility House



COVID-19 nation Response

COVID-19 epidemic evolutionTo discover out about the latest standing of the COVID-19 pandemic evolution and the many up-to-date statistics ~ above the COVID-19 an illness in Mexico, please visit the Mexican government platform v the official data. Official info on the development of the epidemic in Mexico is consolidated by the Secretary that Health, which offers a day-to-day epidemiological update and includes crucial national figures.For the worldwide outlook you can consult the latest an international data in the daily instance reports released by the civilization Health Organisation as well as the an international daily statistics on the coronavirus pandemic advancement including data on confirmed cases and also deaths through country.Sanitary measuresTo find out around the latest public health case in Mexico and also the current sanitary actions in vigour, please consult the Mexican federal government platform COVID-19 Mexico consisting of the up-to-date details on the containment steps put in place and public wellness recommendations. The complete list the the COVID-19 associated websites that the various States the Mexico is accessible here.Travel restrictionsThe COVID-19 situation, including the spread out of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at your destination prior to traveling. Routinely updated information for all countries with regards come Covid-19 connected travel constraints in place including entry regulations, flight bans, check requirements and also quarantine is available on TravelDoc Infopage.It is additionally highly encourage to top COVID-19 take trip Regulations Map provided and updated on the day-to-day basis by IATA.The US federal government website that Centers of disease Control and Prevention gives COVID-19 Travel references by Destination.The UK international travel advice additionally provides travelling overseas advice for every countries, including the latest information on coronavirus, safety and also security, entry requirements and also travel warnings.Import & violin restrictionsFor the information on every the procedures applicable to movement of goods throughout the duration of sanitary emergency because of the COVID-19 outbreak (including ultimate restrictions on imports and exports, if applicable), you re welcome consult the Mexican federal government platform dedicated to Covid response. Additional details have the right to be search on the portal the the Mexican tradition Authorities.For a basic overview of trade restrictions due to COVID-19 pandemic, please consult the section committed to Mexico on the international Trade Centre"s COVID-19 short-lived Trade measures webpage, and the website of people Customs Organisation.Economic restore planFor the info on the economic recovery scheme placed in place by the national federal government to deal with the impact of the COVID-19 pandemic on the mexican economy, you re welcome visit the portal that the mexico government. Additional details in English are easily accessible on the devoted page top top KPMG"s website.For the general overview of the crucial economic plan responses to the COVID-19 outbreak (fiscal, monetary and also macroeconomic) taken by the Mexican federal government to border the socio-economic affect of the COVID-19 pandemic, you re welcome consult the section devoted to Mexico in the IMF’s policy Tracker platform.Support plan for businessesFor the info on the local business support scheme established by the Mexican government to help little and medium-sized providers to deal with the financial impacts the the COVID-19 epidemic on their activity, you re welcome consult the dedicated pages on the main portal Mexican federal government platform (in Spanish).For a basic overview of international SME support policy responses come the COVID-19 outbreak refer to the OECD"s SME Covid-19 policy Responses document.Support arrangement for exportersFor the up-to-date information on possible support plans for exporters in Mexico, if applicable, please consult the Mexican federal government platform, as well as the website that the Secretariat the Economy.