Rating: 6.3 (A)
Mexico
STABLE OUTLOOK
Transparency and Accountability
Public Sector Fiscal Policy
• The general government debt-to-GDP ratio is moderate.
Social Cohesion
6.9 6.6 5.8 6.2
Future Resources
4.5
Monetary Policy
10
8
6
7.6
4
3.6
6.3
2
2
4
6
8
Strategic Capacity
5.5
Capital Markets and Financial Risk
6.1 7.1
Adaptability External Sector
6.9 Macroeconomic Indicators
• Although many reforms have been adopted, most of them face a difficult path toward implementation. • Federal tax revenue as a percent of GDP is the lowest among OECD countries and revenue may come under increasing pressure as about one-third of the state budget is derived from the petroleum sector.
Implementation
6.9
• Parties across the political spectrum have been willing to work together to pass needed reforms.
Weaknesses:
10
6.6
7.1
• The economy has integrated rapidly with that of the United States. • Major reform programs are underway that touch on many aspects of the economy.
Rule of Law
Economic Fundamentals
Strengths:
Crisis Management
Forward-Looking Indicators 5.7
• A lack of adequate transparency, accountability and weak rule of law could have an effect on FDI inflow.
Summary Between 2004 and 2014, the Mexican economy grew at a steady but moderate pace, with real GDP growth averaging 2.75%. That average took a hit in 2009 when the economy contracted 4.7% as a result of the global financial crisis. There was another slowdown in 2013, but Mexico eked out real GDP growth
of 1.4% that year. The 2013 downturn was blamed mainly on a contraction in the construction sector. However, this contraction did not affect the average Mexican because it was concentrated in beachfront housing, which is mainly occupied by foreigners.
Because most home purchases in Mexico are underwritten by governmentsubsidized loans instead of the banking system, construction revived in 2014. The economy grew by 2.1% in 2014, with a further acceleration in growth expected this year to approximately 2.5%. Much of the reason for the positive outlook
1