Mexico Economy

The economy in Mexico is among the largest in the world with the IMF ranking it at number 15. According to the IMF, Mexico’s GDP (purchasing power parity) is the second largest in Latin America and 11^th largest in the world.

Since the North American Free Trade Agreement (NAFTA) took effect in 1994,  Mexico  has increased their manufacturing capabilities substantially to become a key supplier for the U.S. market. A large majority (90%) of Mexico’s trade falls under their numerous free trade agreements.

Above all, the Mexican economy bounced back strongly after the 2009 financial crisis. However, the economy fell back to its pre-crisis average through much of the 2010s. At the end of the decade it started to fall away.

By the end of 2018 the economic growth rate had fallen to 2.1%. In 2019 it fell further, to -0.1%. The impact of COVID-19 means forecasts for 2020 are for -6.6%.

On the other hand, the future looks brighter and models predict 2021 will see an uptick to 3% growth.

2020 was difficult for economies globally but Mexico has the natural resources to recover.

For example, a lot will depend on how well they can harness worker productivity. Mexico has traditionally performed poorly here.

In the last decade, the Mexican government made major reform in the communication, education, energy, and financial sectors, with a goal to increase Mexico’s overall economic competitiveness.