India-Mexico Business Chamber (IMBC)
Mexican Economy Overview
Comprehensive Overview of the Mexican Economy
🇲🇽 Introduction: Resilience and Stability
Over the past decade, Mexico has shown remarkable economic resilience, achieving an average annual growth of 2.1% despite global disruptions. This steady performance reflects Mexico’s:
- Strong institutional frameworks
- Disciplined fiscal and monetary policies
- Focus on balancing domestic demand with external competitiveness
Policy priorities include:
- Expanding social welfare to stimulate consumption
- Promoting financial inclusion
- Supporting private investment through deregulation
- Boosting infrastructure, particularly in energy and logistics
- Deepening global trade integration
Mexico’s Trade and Global Integration
Mexico is among the most globally integrated economies, thanks to FTAs covering 50 countries and preferential access to over 60% of global GDP.
Key trade alliances:
- USMCA: Secures Mexico’s role in North American supply chains
- EU FTA: Modernized agreement enhancing digital trade and services
- Pacific Alliance: Promotes Latin American integration
- CPTPP: Opens markets across Asia-Pacific
Mexico’s position is further strengthened by the nearshoring trend, making it a preferred location for production close to U.S. markets.
Regional Leadership in Latin America
As the region’s second-largest economy after Brazil, Mexico contributes substantially to Latin America’s stability and growth. It leads in:
- Exports (≈33% of regional total)
- Automotive, electronics, aerospace, agribusiness, and medical device sectors
Mexico’s geographic advantage and logistics infrastructure make it a key trade hub regionally and globally.
Economic Performance and GDP Trends (2008–2020)
Mexico’s GDP shows a long-term growth trajectory, punctuated by recoveries from global crises (2008, 2020). As of Q4 2020:
- GDP: $1.2 trillion
- Post-pandemic growth forecast: 2.5%–3% annual average (2021–2025)
Growth is driven by domestic consumption, exports, infrastructure investment, and innovation.
FDI: A Global Investment Magnet
In 2020, Mexico attracted over $29 billion in FDI, with key sectors:
- Manufacturing (automotive, electronics, aerospace)
- Financial services
- Retail/wholesale trade
- Energy and renewables
Top investor countries:
- U.S. & Canada (USMCA-driven)
- EU nations (Spain, Netherlands, Germany, UK)
- Asia-Pacific (Japan, South Korea, China)
Outlook and Strategic Positioning
Mexico is poised to capitalize on:
- Reconfigured global supply chains
- Nearshoring and regional manufacturing
- A growing middle class driving consumption
Ongoing challenges: governance, inequality reduction, legal certainty, and green transition. With reforms and innovation, Mexico can solidify its position as a Latin American economic leader and global player.
Looking to explore business opportunities in Mexico?
IMBC connects you with insights, partners, and networks to succeed in Mexico’s dynamic economy.