México is one of the most economically developed countries of Latin America. It places 13th in economies of the world, with a PIB of approximately 1.2 billion dollars. Mexico is one of the 10 countries in the world and the first in Latin America to receive more foreign direct investment (FDI), according to a UN report.
Mexico poised for Growth
Growth in the Mexican economy was predicted by various groups and entities in 2023. GDP increased 3.7% annually in the first quarter and 3.6% in the second quarter, according to a Bank of Mexico report. The INEGI, a Mexican national statistics agency, published data that showed 3.4% growth in the economy, compared to August of 2022.
Mexican pesos
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Mexico Economy Strengths
Mexico draws on many available resources (human, natural, material, financial) to generate economic activity and income. Mexico continuously produces goods, services, and investments. These Mexican goods and services have value.
Factors that have benefited the Mexican economy are the strength in the labor market, a gradual decline in inflation, the federal government’s welfare spending, the growing nearshoring phenomenon, and high remittances.
The Economic Development Strategy of the Mexican Government has also indicated strengthening growth of consumption by promoting private investment in infrastructure and strategic sectors.
Mexico Exports
Economic growth in Mexico is powered primarily by exports. The Mexican economy is export oriented. Mexican exports include manufacturing exports and Mexican produce, Mexican goods, and Mexican products. The products with the highest level of international sales were automobiles, other motor vehicles, and parts and accessories of motor vehicles. Mexico is the 10th major economy in exportation.
The INEGI, National Institute of Statistics and Geography, published that sales abroad reported a growth of 3.8% in August 2023, compared to the same period of 2022. Four previous months were connected to the growth.
In August 2023, the value of exports reached 52 thousand 360 million dollars, composed of 49 thousand 317 million of non-oil exports and 3 thousand 42 million of oil exports. There was a 4.3% annual increase in non-oil exports.
In the first eight months of 2022, there was a deficit of 24 thousand 741 million; while in the first eight months of 2023, the trade balance presented a deficit of 8 thousand 602 million dollars.
Mexico was the largest trade partner to the United States in the first six months of 2023.
Investment in Technology
Investment in technology, by Mexico, has improved the standard of living in recent years.
Mexican Population and Economic Growth
The Gross Domestic Product (GDP) of any given country grows inevitably with the population index. In the second quarter of 2023, the economically active population in Mexico was 60.2 million. The workforce reached 58.5 million people.
Regarding the relationship between population growth and economic growth in Mexico, the Autonomous University of Nuevo Leon found that population growth has a positive effect on GDP, and there is a two-way relationship between these two variables.
It is important to note that most of the Mexican population and employment is concentrated in urban regions.
Service Sector
Mexico has an economy with strength in the service sector.
Mexico Transport Systems
Mexico has the most modern transport systems of Latin America.
Mexico is 28th in economic complexity, according to Economic Complexity Index (ECI). In its economic complexity, challenges faced by Mexico in its economic recovery include promotion of public policies that advance economic development, human, social and equitable development.
Author: AllMexico.store
References
INEGI
Article by Autonomous University of Nuevo Leon, Jorge Garza-Rodriguez, C. I. Andrade-Velasco, K.D. Martinez-Silva
Deloitte Insights Mexico Economic Outlook
Forbes
The Government of Mexico
OECD