Mexico economic overview
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.
Mexico's economic outlook:
Mexico's economy outperformed the Latin America average in 2022 and 2023, and should do so again in 2024. The country's proximity to the U.S. and participation in the USMCA free trade agreement should spur investment, while a supportive fiscal stance will boost spending. However, in the long run, the economy is merely expected to track average growth in Latin America, held back by multiple unresolved economic challenges.
Mexico's economy in numbers:
Nominal GDP of USD 1,466 billion in 2022.
GDP per capita of USD 11,270 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
Economic structure:
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
Economic growth:
The economy recorded average annual growth of 1.5% in the decade to 2022. To read more about GDP growth in Mexico, go to our dedicated page.
Fiscal policy:
Mexico's fiscal deficit averaged 2.4% of GDP in the decade to 2022. Find out more on our dedicated page.
Unemployment:
The unemployment rate averaged 4.1% in the decade to 2022. For more information on Mexico's unemployment click here.
Inflation:
Inflation averaged 4.5% in the decade to 2022. Go to our Mexico inflation page for extra insight.
Monetary Policy:
Mexico's monetary policy rate ended 2022 at 10.50%, up from 4.50% a decade earlier. See our Mexico monetary policy page for additional details.
Exchange Rate:
From end-2012 to end-2022 the peso weakened by 33.3% vs the U.S. dollar. For more info on the peso, click here.
Quarter-on-quarter GDP growth slowed to 0.2% in Q2 from 0.3% in Q1 according to a flash estimate, below market expectations. The second quarter saw weaker performances in the services, industrial, and primary sectors. Looking at the monthly breakdown, April’s month-on-month contraction was followed by expansion in May and a likely mild contraction in June. Turning to Q3, the Consensus among our panelists is for sequential GDP growth to pick up from Q2’s weak showing. That said, available data is downbeat: Both the manufacturing and non-manufacturing sectors lost momentum in July according to the PMI survey. Moreover, uncertainty over domestic judicial reforms and a potential Trump presidency in the U.S. could be holding back investment. Regarding the latter, Tesla’s owner Elon Musk recently stated that the company has delayed work on a Mexican factory due to concerns over Trump tariffs.
Projections out to 2033.
56 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 51 expert analysts.
Want to get insight on the economic outlook for Mexico in the coming years? FocusEconomics collects projections out to 2033 on 56 economic indicators for Mexico from a panel of 51 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.
