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OECD ECONOMIC SURVEY OF MEXICO
Realising Mexico’s large potential
27 February 2024
oe.cd/mexico
@OECD
The recovery from the pandemic was moderate but has accelerated
Note: LAC is
Source: OECD Economic Outlook database. 2 Real GDP Index 2019Q4 = 100, seasonally adjusted 75 80 85 90 95 100 105 110 75 80 85 90 95 100 105 110 2020 2021 2022 2023 Mexico United States Latin American countries OECD
an unweighted average of Argentina, Brazil, Chile, Colombia, Costa Rica and Peru.
Investment has picked up supported by large public investment projects Source: INEGI. Index January 2020 = 100, seasonally adjusted 3 40 60 80 100 120 140 160 180 40 60 80 100 120 140 160 180 2019 2020 2021 2022 2023 Total Residential construction Non-residential construction Machinery and equipment
Inflation is falling towards the central bank target range
Inflation % 4 0 2 4 6 8 10 0 2 4 6 8 10 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Headline inflation Core inflation Inflation expectations
Note: The shaded area represents the Central Bank's inflation target range. Inflation expectations refer to expectations by the private sector for the next 12 months.
Source: Banxico.
Growth is projected to moderate and inflation will continue declining
Real GDP growth, % 2023 2024 2025 Consumer price index, % change 2.0 2.0 2.5 3.1 3.2 4.1 5.5 Unemployment rate, % 3.1 3.0 2.8 Source: OECD Economic Outlook database. 5
Further buttressing fiscal
policies
Public spending is low, due to low revenue collection
Note: LAC is an unweighted average of Argentina, Brazil, Chile, Colombia, Costa Rica and Peru. OECD is an unweighted average.
Source: IMF World Economic Outlook, October 2023.
General government expenditure % of GDP, 2022 7 0 10 20 30 40 50 60 0 10 20 30 40 50 60 CRI IRL CHL TUR MEX KOR LAC CHE COL USA LTU ISR AUS NOR EST LVA CAN OECD SVK NZL NLD POL LUX JPN GBR CZE PRT DNK SVN ESP SWE ISL HUN DEU AUT GRC FIN BEL ITA FRA
The fiscal deficit has recently increased
Note: Data for 2024 are estimates.
Source: Secretaría de Hacienda y Crédito Público.
Fiscal balance Non-financial public sector, % of GDP 8 -5 -4 -3 -2 -1 0 -5 -4 -3 -2 -1 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Spending
pressures are rising in key areas such as education
Public expenditure % of GDP 9 0 1 2 3 4 5 6 0 1 2 3 4 5 6 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Infrastructure Health Education Pensions
Source: Centro de Investigación Económica y Presupuestaria A.C. (CIEP) based on Secretaría de Hacienda y Crédito Público.
Higher tax revenues would allow increasing productivityenhancing spending such as education
Note:
LAC
Tax revenues % of GDP, 2021 10 0 10 20 30 40 50 0 10 20 30 40 50 MEX COL CHL TUR CRI LAC USA AUS ARG KOR JPN CAN BRA GBR OECD POL ESP DEU ITA FRA
is an unweighted average of Argentina, Brazil, Chile, Colombia and Costa Rica. Source: OECD Revenue Statistics Database.
There is room to raise more revenue from property taxes
Note: LAC is an unweighted average of Argentina, Brazil, Chile, Colombia, Costa Rica and Peru. OECD is an unweighted average of all member countries with available data. Source: OECD Global Revenue Statistics database.
Taxes on immovable property % of GDP, 2021 or latest year 11 0 1 2 3 0 1 2 3 LUX TUR MEX PER CRI ARG DEU LAC BRA CHL COL OECD ESP ITA FRA GBR USA
Boosting productivity growth
productivity grow
Source: OECD Productivity database. GDP per person employed Index 1992 = 100 13 90 100 110 120 130 140 150 90 100 110 120 130 140 150 1992 2002 2012 2022 Mexico OECD
Low
has held back the economy and needs to be revived
Improving business productivity can help seize additional value chains and spread the benefits of trade
Source: UN Comtrade. US imports from China and Mexico 12-month moving average, % of all imports 14 10 15 20 25 10 15 20 25 2017 2018 2019 2020 2021 2022 2023 China Mexico
Note: LAC is an unweighted average of Chile, Colombia, and Costa Rica.
Source: OECD Broadband Portal (database).
Accelerating digitalisation would particularly help small and medium-sized enterprises
Fixed broadband subscriptions per 100 inhabitants December 2022 15 0 10 20 30 40 50 0 10 20 30 40 50 COL MEX LAC CRI TUR CHL POL LVA ISR LTU AUT IRL ITA SVN SVK FIN AUS OECD ESP JPN HUN NZL EST ISL CZE LUX USA SWE GBR GRC CAN BEL PRT NLD DEU DNK KOR NOR FRA CHE
municipal regulations
Source: INEGI, Encuesta Nacional de Calidad Regulatoria e Impacto Gubernamental en Empresas 2020 (ENCRIGE). Perceptions of barriers to meet regulatory requirements % of enterprises, 2020 16 0 20 40 60 80 100 0 20 40 60 80 100 Cost generated to meet regulations Preparing and delivering the requested information Providing same information more than once Time required to comply with regulations National average State with minimum level State with maximum level
Streamlining state and
would boost competition
Generating more electricity from renewables would boost foreign direct investment
Note: LAC is an unweighted average of Argentina, Brazil, Chile, Colombia, Costa Rica and Peru.
Source: OECD Green Growth indicators.
% of total electricity generation from renewable sources 2021 or latest year 17 0 20 40 60 80 100 0 20 40 60 80 100 KOR POL USA JPN FRA MEX ARG AUS TUR GBR DEU ITA GRC ESP CHL OECD PER LAC CAN COL BRA CRI
Enhancing equality of opportunities
Targeted tutoring to students and better training of teachers would enhance education outcomes
19 0 10 20 30 40 50 0 10 20 30 40 50 KOR CAN SVN IRL USA POL LTU SVK CZE GRC ISR AUS FIN CHE NLD EST AUT LVA FRA LUX BEL CHL GBR NZL HUN OECD SWE DEU NOR PRT DNK ITA COL ISL LAC ESP ARG BRA TUR CRI MEX Share of 25-34 year-olds with below upper-secondary education as the highest level attained %, 2022
Note: LAC refers to Argentina, Brazil, Chile, Colombia and Costa Rica. Source: OECD Education Database.
gender gaps, including through better childcare,
economic
Source: OECD (2023), Joining Forces for Gender Equality: What is Holding us Back?, OECD Publishing, Paris, https://doi.org/10.1787/67d48024-en. Gain in GDP growth per capita from closing gender gaps on the labour market percentage points 20 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0 0.1 0.2 0.3 0.4 0.5 0.6 LTU LVA SVN EST SWE PRT LUX FIN USA SVK FRA ISR NOR CZE CAN GBR HUN DNK ESP BEL DEU OECD GRC NZL ISL KOR AUS CHL POL JPN CHE AUT NLD IRL ITA LAC COL TUR CRI MEX
Closing
would result in large
gains
Housing conditions need to be improved
Note: A household is considered as living in overcrowded conditions if the number of rooms is not enough for the household (given its age and sex composition, and if it includes a couple).
Source: OECD (2023), Housing overcrowding (indicator).
Share of households living in overcrowded conditions %, 2020 or last year available 21 0 5 10 15 20 25 30 35 0 5 10 15 20 25 30 35 NZL GBR JPN IRL ESP USA BEL NLD KOR PRT CHE NOR FRA LUX CRI DNK SVN EST ISL FIN AUT HUN CZE OECD SWE LTU GRC ITA SVK TUR POL MEX LVA COL
Expanding the rental market would improve access to affordable housing
Note: Housing cost burden include principal repayment and interest payments. Households considered are households in the bottom income quintile. Source: OECD Affordable Housing Database. 22 0 10 20 30 40 50 0 10 20 30 40 50 SWE CHE FIN NLD NOR KOR NZL GBR OECD DEU AUS PRT BEL FRA CHL CAN ESP GRC MEX USA ITA Housing cost burden of low-income households with a mortgage % of disposable income, 2020 or last year available
Main messages
Fiscal policies
Gradually raise more revenues and improve spending efficiency to increase spending in key areas such as education, physical and digital infrastructure, while maintaining fiscal prudence
Productivity growth
Enhance digital connectivity, streamline regulations and shift to renewables
Equality of opportunities
Support female labour market participation, strengthen skills and facilitate access to adequate and affordable housing
For more information
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
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