Going for growth - Mexico

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Mexico The gap in GDP per capita relative to the upper half of OECD countries remains large due to low productivity levels. Average hours worked are among the highest in the OECD but low labour market participation of women hinder the contribution of labour to growth. Absolute poverty has declined in recent years, however, relative poverty is still high. Significant inequalities persist in incomes and wealth as well as inequality in opportunities in jobs, housing and education. They also have a strong territorial dimension, impacting negatively on Mexico’s growth potential. Mexico has made progress to protect the environment through international commitments, and has moved away from transport fuel subsidies, increased excise taxes on transport fuels and introduced a new carbon tax. However, emissions from energy and transport sectors continue to increase rapidly. In the recent years, Mexico has adopted a number of structural reforms to boost productivity growth. Full and efficient implementation and follow-up will be crucial to bear the full benefits of these past reforms. Although the creation of formal jobs has outpaced informal job creation, high informality remains a drag on productivity, due to an inefficient allocation of resources and insufficient workers’ training. Informality is also a major driver of persistent high inequalities and poverty, which extend beyond working lives. Growth performance, inequality and environment indicators: Mexico A. Growth Average annual growth rates (%) GDP per capita Labour utilisation of which: Labour force participation rate Employment rate1 Employment coefficient2 Labour productivity of which: Capital deepening Total factor productivity Dependency ratio

2012-18 1.3 -0.2 -0.3 0.3 -0.2 1.0 0.1 0.8 0.5

Level

Annual variation (percentage points)

2016 45.8 (31.7)*

2012-16 0 (0)*

-50

5 (7.6)*

0.1 (0)*

-60

2016 4.4 (10.9)* 0.3 (0.3)* 1.5

Average of levels 2010-16 4.4 (11.3)* 0.3 (0.3)* 1.6

B. Inequality and environment

3

Gini coefficient Share of national disposable income held by the poorest 20%

GHG emissions per capita4 (tonnes of CO2 equivalent) GHG emissions per unit of GDP4 (kg of CO2 equivalent per USD) Share in global GHG emissions4 (%) * OECD simple average (weighted average for emissions data)

C. Gaps in GDP per capita and productivity are wide and persistent

2002-08 1.3 0.2 0.7 0.0 -0.5 0.5 0.0 0.5 0.6

Gap to the upper half of OECD countries5 Per cent 0 -10 -20 -30 -40

-70 GDP per capita

GDP per hour worked

-80

Source: Panel A: OECD, Economic Outlook Database; Panel B: OECD, Income Distribution and National Accounts Databases; United Nations Framework Convention on Climate Change (UNFCCC) Database and International Energy Agency (IEA), Energy Database; Panel C: OECD, National Accounts and Productivity Databases. StatLink 2 https://doi.org/10.1787/888933955180


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Going for growth - Mexico by OECD - Issuu