Mexico’s free market economy is large and relatively stable, although like most countries, it has been buffeted by the global pandemic. Its gross domestic product (GDP) of US$1.076 trillion was ranked fifteenth globally by the World Bank in 2020, the latest data available. It is the second largest economy in Latin America, after Brazil.
Mexico is the third largest trading partner of the United States and represents the second largest export market for U.S. products and services. Mexico also has free trade agreements with over 50 countries. More than 90 percent of global trade conducted by Mexico is under free trade agreements.
The Mexican economy is increasingly dominated by the country’s private sector and is driven by expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution and airports. Mexico is among the world’s top 25 countries in its proportion of manufactured goods exported that are high-tech. Tourism, an important source of revenue and jobs for the country, remains 27 percent lower than pre-pandemic levels. Overall, consumptions of goods and services in Mexico is about three percent lower than 2019.
Although Mexico has had a comparatively strong global economy, income distribution remains highly unequal. The country’s per capita income is roughly one-third that of the U.S. and nearly 50 percent of the country is classified as poor.
The Mexican economy is projected to grow 3.3 percent in 2022 and 2.5 percent in 2023, according to the OECD. It grew 5.9 percent in 2021. Inflation is projected to be 4 percent in 2022, 0.5 percent less than 2021. Unemployment should continue its downward trend from 4.1 percent in 2021 to 3.8 percent in 2022.