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The World Bank In Mexico

Mexico is the second largest economy in Latin America. The World Bank Group engagement with the country is structured around a model that provides development solutions adapted to the country, with an integral package of financial, knowledge and convening services.

Mexico Overview

With a population of almost 130 million, a rich cultural history and diversity, and abundant natural resources, Mexico is among the 15 largest economies in the world and the second-largest economy in Latin America. The country has solid macroeconomic institutions, is open to trade, and has a diversified manufacturing base connected to global value chains. 

Over the last three decades, Mexico has underperformed in terms of growth, inclusion, and poverty reduction compared to similar countries. Its economic growth averaged just above 2 percent a year between 1980 and 2022, limiting progress in convergence relative to high-income economies.

The Mexican economy grew by 3.2% in 2023, the second consecutive year of growth exceeding 3%, a moderation after the post-pandemic rebound. The official multidimensional poverty rate fell from 43.9% in 2020 to 36.3% in 2022, lifting 8.8 million Mexicans out of poverty, although extreme poverty has decreased more slowly.

The economy has recovered its employment and Gross Domestic Product (GDP) pre-pandemic levels. Mexico’s stable macroeconomic framework, the U.S. dynamism, and solid manufacturing base will support economic growth.

To accelerate sustainable economic growth and poverty reduction over the medium term, Mexico needs to address structural constraints such as limited access to finance, insecurity, informality, regulatory burdens, and infrastructure bottlenecks. Tackling these challenges is essential to fully seize the opportunity that nearshoring represents in the current international environment.

Last Updated: Mar 27, 2024

The Country Partnership Framework (CPF) for Mexico was discussed by the World Bank Group (WBG) Board of Executive Directors on February 27, 2020. The CPF covers a six-year period (2020-2025) and aligns the WBG’s engagement with the government’s National Development Plan. The objectives remain highly relevant in the present context, allowing flexible and strategic adjustments to respond to the current supply and demand shocks and to support a strong resilient economy. It builds on the analysis of the Systematic Country Diagnostic (SCD) and reflects the views and strategy of the authorities.

The World Bank has been supporting Mexico’s efforts to deepen financial inclusion and expand access to finance, which has been a critical bottleneck for growth and poverty reduction. The Bank has supported Mexico’s expansion of needed financial access to poor and rural populations, women, youth, and micro, small, and medium-sized enterprises (MSMEs).

Through an established network of private financial intermediaries (PFIs), for example, the Expanding Rural Finance Project increased the availability of finance to rural MSMEs in areas where commercial banks had not been able to reach local producers. This Project helped to establish and/or improve credit, risk, and management capacity of 255 small PFIs located in rural areas. Between 2016-2019, 173,981 credits for productive purposes were extended to 139,253 rural producers and MSMEs (average loan size of US$1,850), of which 76 percent live in rural areas in the poorer states of the South, 83 percent are women, and 22 percent live in communities classified as marginalized or highly marginalized by the National Council for Population.

people in underserved sectors will be able to access the financial system in 2015, thanks to a project financed by the World Bank.

Mexico: Commitments by Fiscal Year (in millions of dollars)*

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Emerging Markets: Analyzing Mexico's GDP

essay about mexican economy

Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.

essay about mexican economy

Mexico is a classic example of a two-sided economy. While one part shines bright with a trillion-dollar gross domestic product (GDP) , the other part is overshadowed by the fact that approximately 36% of its population lives below the poverty line. Mexico has the second-highest degree of income inequality amongst the 38 member nations of the Organisation for Economic Co-operation and Development (OCED) .

In this article, we review the primary sectors that contribute to Mexico's gross domestic product and how they impact the nation's economy as a whole.

Key Takeaways

  • In 2022, Mexico's gross domestic product (GDP) was $1.41 trillion.
  • From 2010 to 2018, Mexico's annual GDP rate showed modest growth, ranging from 1.35% to 5.12%.
  • In 2020, the GDP rate for Mexico was -8.24%, a contraction resulting from the demand and supply shocks caused by the COVID-19 pandemic.
  • In 2021 and 2022, the GDP rate bounced back after the worst of the COVID-19 pandemic had passed. GDP grew at a 4.7% and 3.1% rate, respectively, in 2021 and 2022.
  • The agriculture sector contributes just 4.1% to the nation's GDP and employs about 12% of the labor force.
  • The industry sector accounts for 32.1% of Mexico's GDP, while the services sector accounts for 58.8%.

Mexico's GDP

The country has managed to move ahead despite poverty, corruption, income disparity, and the presence of a large informal economic sector. The World Bank categorizes Mexico as an “upper middle income” nation. Mexico’s $1.41 trillion gross domestic product (GDP), as of 2022, made it the 14th-largest economy in the world in terms of nominal gross domestic product while placing it on the 84th spot in terms of purchasing power parity (using constant 2017 international dollars).

Mexico is the second-largest economy in Latin America after Brazil and is also an oil-exporting nation. The graph below, from the World Bank, shows the annual percentage growth rate of GDP at market prices based on constant local currency.

As you can see in the graph above showing annual GDP growth in Mexico from 1980 to 2022, the Mexican economy has weathered many challenges over the years. In 2009, the GDP took a massive negative dip. This was synchronized with the financial crisis of 2008-09 that affected almost all global economies.

Mexico recovered and between 2010 and 2018 showed positive growth. However, the modest growth during these years—ranging from a high of 5.12% to a low of 1.35%—showed that the economy was struggling through some issues. Chief among these is the end of the so-called commodity super-cycle—the period from the late 1990s until the financial crisis of 2008 .

During this time, most commodities experienced double-digit annual real price growth fueled by rising demand from the United States and Eastern Europe, as well as the so-called BRICS economies. BRICS is an acronym for Brazil, Russia, India, China and South Africa (the group will add six nations next year: Saudi Arabia, Iran, Ethiopia, United Arab Emirates, Egypt, and Argentina).

In 2019, Mexico's growth rate went negative for the first time in a decade, dipping to -0.05%. According to the World Bank, compared to similar economies, Mexico underperformed in terms of poverty reduction, growth, and inclusion. The economy contracted by 8.24% in 2020, experiencing demand and supply shocks caused by the impact of the COVID-19 pandemic. But the economy recovered post-2020 and showed positive growth in 2021 and 2022, according to the World Bank, growing at a rate of 4.7% in 2021, and 3.1% in 2022.

GDP Composition

The composition of the gross domestic product is broadly split into the primary sector (agriculture), the secondary sector (industry), and the tertiary sector (services). According to 2022 data by the World Bank, agriculture, forestry, and fishing accounted for 4.1% of the GDP, while industry and services accounted for 32.1% and 58.8% of the GDP, respectively.

Agriculture a Small Part of the GDP

Agriculture, which includes forestry, fishing, hunting, livestock production, and cultivation of crops, contributes a mere 4.1% to Mexico’s GDP. The share had remained below 4% for over 20 years. Nevertheless, agriculture, or the primary sector, plays a crucial role in indirect ways for the Mexican economy. The primary sector has helped in strengthening trade ties with the United States as well as in alleviating poverty and creating jobs. Agriculture provides employment to about 12% of the nation’s labor force. However, in rural areas, more than half of the population might be involved in agricultural activities .

Mexico’s agricultural sector can be split into two parts:

  • Subsistence farming dependent on family farmers and unskilled laborers in the rural areas
  • Highly-competitive export-oriented farming

While farms focused on agricultural exports have helped lift the earnings and standard of living of some workers, they have also intensified the income inequality among agricultural workers. The World Bank graph below shows the contribution of the agricultural sector since 1980 to Mexico's gross domestic product.

Agricultural Imports and Exports

Mexico's agricultural imports in 2021 totaled approximately $41.4 billion, while its exports amounted to approximately $46.6 billion. Mexico's biggest trading partner is the United States, which purchased about 80% of the nation's agricultural exports.

Mexico and the U.S. have a complementary trade relationship, which refers to the fact that the two countries tend to export different agricultural products to one another. For example, Mexico does not produce enough grains and oilseeds to meet its domestic demand, so it imports large amounts of these products from the United States. Beer, distilled spirits, fruit, and vegetables comprise about 83.6% of U.S. agricultural imports from Mexico.

Industry Sector

The industrial sector, which includes manufacturing, mining, oil, and gas , has contributed approximately 25% to 35% of Mexico’s GDP. The numbers have hovered around the same percentage for the past 35 years. From 2002 to 2022, industry averaged about 32% of Mexico’s GDP. Industry employs 26% of the nation’s labor force.  The graph below shows the contribution of the industrial sector since 1980 to Mexico's gross domestic product based on World Bank data. 

The most well-known and developed industries in Mexico are the automotive, electronics, and oil industries.

Although it serves mainly as an assembly manufacturer, in recent years the automotive industry has advanced to conducting independent research and development . Some of the most well-known car manufacturers like General Motors Co ( GM ), Ford Motor Co ( F ), Toyota Motor Corp ( TM ), Mercedes Benz (a subsidiary of Daimler AG), Honda Motor LTD ( HMC ), and Volkswagen Group have set up operations in Mexico.

Mexico also has the oil to power these cars. In 2021, the nation ranked 12th in the world for crude oil production with 1.9 million barrels produced daily. Oil industry earnings amounted to about 16% of total government revenues. A key component of Mexico's economy is its trading partnership in oil products with the U.S. In 2021, the U.S. imported over 212 million barrels of Mexico's heavy crude oil.

Starting in 1938, the state-owned Petroleos Mexicanos (PEMEX) had been solely responsible for exploration, research, and sale of oil in Mexico. Inefficient infrastructure , corruption, and bureaucracy were cited as reasons for the underperformance of PEMEX. This led the Mexican government to open up the sector to foreign players in 2013 through an auction that encouraged private investment to revive its oil and gas production.

Between 2013 and 2018, the government awarded 107 contracts to private oil and gas contractors as part of the nation's energy reform mandates. However, the López Obrador administration has expressed reluctance to continue private sector investment in the oil industry, preferring instead to focus its efforts on strengthening PEMEX. Starting in December 2018, the Mexican government announced it would halt the private investment auction process. As of August 2023, the private investment auction process has not been restarted.

Electronics

The electronics industry has grown tremendously, especially with the Mexican government’s initiatives designed to promote the nation's competitiveness in electronics and technology. The goal is to make Mexico a top exporter of electronic goods. Other than manufacturing, mining is also an important component of industrial activity. Mexico is the leading producer of silver in the world and is rich in minerals like fluorspar, graphite, and strontium.

$18.9 billion

The value of Mexican exports of minerals and ores in 2021.

Manufacturing

In manufacturing, Mexico has the advantage of high labor productivity and free trade agreements with multiple nations. Rising wages in China also make Mexico a more attractive destination for manufacturing. And natural gas prices (tied to the U.S.) are helping the country boost its manufacturing. Manufacturing contributes 19% to the country’s GDP.

Through the twentieth century, Mexico transformed from an agrarian to an industrial economy. By the 1960s, manufacturing was at the center stage and had become the engine of growth. However, the services sector slowly started to assume a more important role and has now become a dominant force for the Mexican economy.

The services sector, or tertiary sector, employs 62% of the nation’s labor force and contributes a significant 58.8% to the GDP.  The graph below shows the contribution of the services sector since 1980 to Mexico's gross domestic product based on the World Bank data.

Financial service is one of the major components of Mexico’s services sector and has attracted a significant amount of foreign investment . The financial sector in Mexico is largely foreign-owned. For example, Banamex is a part of Citigroup Inc. ( C ), Bancomer is a unit of Spain’s BBVA, SERFIN is part of Santander, Canada’s Scotiabank owns Inverlat, and Bital operates as part of HSBC ( HSBC ).

Other than financial services , tourism is another important segment of the service industry. Mexico has a huge scope for its tourism industry with 35 sites on UNESCO’s list of cultural or natural world heritage.

What Rank Is Mexico in GDP in the World?

Mexico's gross domestic product (GDP) was $1.414 trillion dollars in 2022, making it the 14th largest country in the world by GDP, following South Korea at $1.665 trillion, according to World Bank statistics.

Does Mexico Have a Higher GDP Than Brazil?

No. Brazil's GDP was $1.920 trillion dollars in 2022, making it the 11th largest country in the world by GDP, following Italy who caps off the top 10 with $2.010 trillion, according to World Bank statistics. Mexico has the 14th highest GDP on the World Bank's list at $1.414 trillion.

What Country Has the Largest GDP in the World?

The United States has the largest GDP in the world. The U.S.'s GDP was $25.462 trillion in 2022, according to the World Bank. China's GDP was $17.963 trillion, making it the second largest. Japan's GDP was $4.231 trillion, making it third. In fourth place was Germany, with $4.072 trillion, and in fifth place was India, with $3.385 trillion.

Mexico has greatly benefited from its international treaties of free trade, most notably the North American Free Trade Agreement (NAFTA) . The treaty not only created the largest free trade zone in the world, but also laid a foundation for the growth and prosperity of the United States, Mexico, and Canada. Since its introduction in 1994, the U.S. and Mexican economy has become increasingly integrated with strong trade and supply chain links. In 2020, NAFTA was replaced by the United States-Mexico-Canada Agreement (USMCA) .

Today, Mexico has a large, diversified, and strong economy with its oil sector, remittances from the United States, exports, agriculture, mining, tourism, and industrial activity playing the most significant roles in its growth. However, the country also suffers from problems like corruption , a huge informal economy, drug cartels , and income inequality which need to be tackled to ensure sustainable growth.

Correction—Dec. 2, 2021: A previous version of this article included incorrect data in the "Industry, Value Added (% of GDP) in Mexico" chart.

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The World Bank. " GDP per Capita, PPP (Constant 2017 International $) ." Download Excel.

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BRICS 2023 South Africa. " Summit Declarations ," Download "XV BRICS Summit Johannesburg II Declaration, 24 August 2023," Page 26.

University of Virginia. " Global South Studies: BRICS ."

The CIA World Factbook. " Mexico ."

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Inter-American Institute for Cooperation on Agriculture. " Mexico: A Giant in the Agriculture Sector that is Determined to Bridge Social Divides in Rural Areas ."

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International Trade Administration. " Mexico - County Commercial Guide: Oil and Gas ."

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U.S. Energy Information Administration. " U.S. Natural Gas Pipeline Exports to Mexico Set a Monthly High in June 2023 ."

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The World Bank. " Employment in Services (% of Total Employment) (Modeled ILO Estimate) ."

International Trade Administration. " Mexico - Country Commercial Guide: Trade Financing ."

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Office of the United States Trade Representative. " United States-Mexico-Canada Agreement ."

Office of the United States Trade Representative. " North American Free Trade Agreement (NAFTA) ."

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A tale of two Mexicos: Growth and prosperity in a two-speed economy

In the 20 years since the North American Free Trade Agreement went into effect, Mexico has become a global manufacturing leader and a prime destination for investors and multinationals around the world. Yet the country’s economic growth continues to disappoint, and the rise in living standards has stalled. The root cause is a chronic productivity problem that stems from the economy’s two-speed nature. A modern, fast-growing Mexico, with globally competitive multinationals and cutting-edge manufacturing plants, exists amid a far larger group of traditional Mexican enterprises that do not contribute to growth. These two Mexicos are moving in opposite directions. The largest companies are raising productivity by an impressive 5.8 percent a year, while the productivity of small, slow-growing enterprises is falling by 6.5 percent a year (exhibit). And with employment growing faster in the traditional Mexico, more labor is shifting to low-productivity work.

Falling productivity in small, traditional companies, which accounted for 42 percent of employment in 2009, offset gains by modern companies.

This problem explains why GDP growth has risen by only 2.3 percent a year, on average, since 1981 and Mexico lags behind countries whose GDP per capita it once surpassed, despite more than 30 years of market-opening measures. The country has an urgent need to reconcile the two Mexicos because its demographic dividend—the rapid labor-force expansion that has contributed more than two-thirds of GDP growth—is about to fade. Unless Mexico can nearly triple productivity growth from the recent 0.8 percent a year average, the country could be headed toward 2.0 percent annual GDP growth rather than the 3.5 percent goal the Bank of Mexico estimates for 2014.

This is the central finding of A tale of two Mexicos: Growth and prosperity in a two-speed economy , a new report from the McKinsey Global Institute and McKinsey’s Mexico office. The report concludes that the country can meet the productivity challenge and raise GDP growth to the 3.5 percent target. But that will happen only if Mexico can raise productivity in traditional small businesses, move more businesses and workers into the modern sector, and continue to raise the productivity of large, modern corporations. Policy changes will be required to remove both perverse incentives that discourage small companies from growing and barriers to launching and expanding businesses. In addition, Mexico will need to invest in broad enablers, such as reducing the cost of energy, expanding infrastructure, and improving labor-force skills.

Transform the traditional sector

Traditional, low-productivity businesses are pervasive across the Mexican economy and often constitute the majority of establishments in a given sector. For example, more than 90 percent of the baking industry is made up of small local shops, which have, at best, one-fiftieth of the productivity that the largest top-performing industrial bakeries achieve. In auto parts, 80 percent of all enterprises have ten or fewer employees. These firms provide low-cost assembly work to suppliers working directly for Mexico’s seven global auto manufacturers and are only about 10 percent as productive as these large suppliers. This reduces the sector’s overall productivity to just 21 percent of the US average.

The report examines how to raise productivity in small, low-productivity enterprises in three sectors: the manufacture of food, the manufacture of auto parts, and the retailing of food and beverages. These measures include investments in technology—even adopting simple tools (such as point-of-sale terminals) in mom-and-pop stores could have significant effects. Many small companies have not invested to raise growth and productivity, because they lack access to reasonably priced financing.

Policy changes

Mexico has instituted many reforms to open markets and promote competition, but significant obstacles to growth remain. Special tax breaks for small enterprises, intended to protect traditional businesses, encourage companies to stay small, informal, and unproductive. Mexico can also streamline regulatory processes to make compliance easier and examine the remaining labor-law inflexibilities that discourage full-time hiring. Most important of all, to discourage informality the country can redouble its efforts to enforce tax laws and other rules; today, informal businesses employ more than half of nonfarm workers. Mexico needs to become a place where formal, compliant companies grow and prosper—and inspire others to emulate their success—and where companies that do not play by the rules suffer the consequences.

Access to capital

Between Mexico’s largest, most productive corporations and the millions of small, traditional, and unproductive enterprises there is an increasingly stressed group of midsize companies. While some are pushing innovation and generating well-paying new jobs, their productivity has been growing by only about 1 percent a year and their share of employment has fallen from 41 percent in 1999 to 38 percent in 2009. The World Bank estimates that Mexico’s financial industry underserves 53 percent of these midsize firms, and we calculate that this problem accounts for roughly three-quarters of the estimated $60 billion credit gap across Mexican businesses. Additional reforms to enforce lenders’ rights, including rules for tracking movable collateral (such as office equipment and vehicles) can help.

We believe that with the right measures, Mexico can accelerate its productivity and raise GDP growth to 3.5 percent a year or even higher. Reaching this goal depends on crafting the right approaches, enlisting the aid of the private sector, and translating broad agreements into detailed policies and legislation, as well as implementing them throughout the country.

Eduardo Bolio is a director in McKinsey’s Mexico City office, where Tomás Lajous is a principal and Eugenia Ramirez and Morten Rossé are consultants; Jaana Remes is a partner with the McKinsey Global Institute, where James Manyika is a director.

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Christopher wilson cw christopher wilson deputy director, mexico institute - woodrow wilson international center for scholars, executive summary.

Some three decades ago, Mexico made a bet on the global economy, and at a time when populism and protectionism are on the rise, the payoff is at risk. In response, Mexico must double down on its openness while addressing the critical structural problems, including corruption and inequality, that inhibit its domestic economy and led to the sweeping electoral victory of President Andrés Manuel López Obrador (AMLO) in 2018. This essay reviews Mexico’s economic progress and the challenges ahead as a new administration takes office at a time of significant stress on regional and global economic institutions.

For more than a half-century following the Mexican Revolution, the country’s foreign policy was based on the principal of noninterventionism, a not so subtle way of telling the United States and others not to meddle in Mexico’s domestic affairs. The economic equivalent was Mexico’s policy of import substitution, which raised tariffs and barriers to foreign investment designed to protect the country’s domestic industries from international competition. The two combined to make Mexico an insular country, and despite the significant economic expansion achieved in the decades following World War II, by the 1970s, Mexico’s economy and politics were showing signs of strain.

In the following decade, Mexico’s relationship with the world was flipped on its head. Instead of raising barriers in an effort to protect Mexican sovereignty, the country’s leaders made an audacious bet on the nation’s integration into the global economy, especially in North America. In 1986, Mexico joined the General Agreement on Tariffs and Trade (GATT), the precursor to today’s World Trade Organization, and then in 1994 took the dramatic step to join the United States and Canada to form the North American Free Trade Agreement (NAFTA). The results have been dramatic. In 1985, Mexico’s trade-to-GDP ratio was 26 percent, but by 2017 it was up to 78 percent, belying its status as a modern manufacturing powerhouse building goods on the integrated North American production platform. 1 Yearly inflows of foreign direct investment increased from an average of just over 1 percent of GDP in the 1980s to approximately 2.5 percent during the past decade. 2 Today, Mexico regularly ranks among the most cost-effective places to locate manufacturing operations in the world. 3 In this sense, Mexico has become a model of successful integration into global value chains.

Mexico’s export-oriented economy is highly efficient and has served as a motor of economic development, but the current economic model faces two significant and distinct challenges. The first is a direct result of Mexico’s bet on its integration into the North American and global economy. At a time when U.S. (and some might say global) trade policy is shifting away from the open, rules-based system supported by the United States since the 1940s and toward a more mercantilist approach favoring protectionist tactics, Mexico’s dependence on the U.S. market is proving to be a greater risk than most had assumed. In 2017, Mexico sent more than 80 percent of its exports to the United States, relying heavily on access to the market ensured by NAFTA and the World Trade Organization system of preferential tariffs, both of which are under significant stress. 4

The second challenge is rooted not in what Mexico has done, but rather what it has failed to do. Implicit in Mexico’s bet on economic openness was the idea that its advances in trade policy, coupled with the macroeconomic stability achieved through improvements in fiscal and monetary policy, would be sufficient to drive economic growth. Unfortunately, the export-fueled motor has not proven strong enough to overcome the significant drag created by multiple structural deficiencies and has instead propelled a part of Mexico forward while leaving much of the country behind. World Bank figures show that Mexico’s average annual growth of GDP per capita has been just over 1 percent since 1990. Despite important improvements in access to health care, education, and housing, poverty as measured by income remains stubbornly high, at above 50 percent. 5 Weaknesses in the Mexican education system, insufficient energy and transportation infrastructure, a lack of access to credit, the still-limited rule of law, and a misalignment of incentives in the social insurance and tax regimes have combined to stifle growth and allow inequality to persist. Despite the fact that the near-term risks to the Mexican economy have quite a bit to do with U.S. trade policy and the global economic environment, the most important missing ingredient in Mexico’s economic outlook is a stronger domestic economy.

As a result, Mexico’s first priority must be a strategy for inclusive growth. At this point, it is quite clear that a small number of highly productive workers in a small number of highly competitive firms are not enough to bring broad-based prosperity to Mexico. Government programs can help address disparities through targeted infrastructure investments and a project to expand access to a high-quality education, but these must be accompanied by efforts to address market failures as a result of uneven contract enforcement, a problematic social insurance system design, and barriers that slow the growth of small and medium firms. To do so, the government must be judicious in deciding when to intervene and when to play the role of facilitator guaranteeing an even playing field and preventing market distortions. A pragmatic approach to economic management is required, along with a clear-headed view of both what has and has not worked.

One of the biggest benefits of NAFTA for Mexico was to lock in its domestic liberalizing reforms and to thereby give investors confidence that Mexico was a safe place to do business. As has been argued by one of Mexico’s original NAFTA negotiators, Luis de la Calle, in the face of threats to NAFTA and the broader trading system, it is incumbent upon Mexico to once again show the world that it is committed to a path of modernization, economic stability, and openness. 6 Mexico’s decision to move forward with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) even as the United States withdrew was an important step in this direction. Recommitting itself to this economic path, even as new efforts are made to promote inclusive growth, is the best way to clear the cloud of uncertainty that has hung over the Mexican economy since 2017.

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March 26, 2019

  • “Comercio (% del PIB),” The World Bank, 2018, https://datos.bancomundial.org/indicador/NE.TRD.GNFS.ZS?locations=MX .
  • Author’s calculations with data from “Foreign Direct Investment, net inflows (% of GDP),” The World Bank, 2017, https://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS?locations=MX .
  • Harold Sirkin, Micauel Zinser, and Justin Rose, “The Shifting Economics of Global Manufacturing,” Boston Consulting Group , August 19, 2014, https://www.bcg.com/en-us/publications/2014/lean-manufacturing-globalization-shifting-economics-global-manufacturing.aspx .
  • Secretariat of Economy of the Government of Mexico, “Estadisticas de Comercio Exterior de Mexico,” 2018, https://www.gob.mx/cms/uploads/attachment/file/367215/Acum-Exporta-jun2018.pdf .
  • Felipe Meza Goiz, “La Pobreza en México y la estabilidad macroeconómica,” Animal Politico , April 3, 2018, https://www.animalpolitico.com/blogueros-blog-mexico-como-vamos/2018/04/03/la-pobreza-en-mexico-y-la-estabilidad-macroeconomica/ ; and “Evolución de las Dimensiones de la Pobreza 1990-2016,” Coneval , https://www.coneval.org.mx/Medicion/Paginas/Evolucion-de-las-dimensiones-de-pobreza.aspx .
  • Luis de la Calle Pardo, “Para enfrentar a Trump, no es plan B, sino el A,” El Universal , October 18, 2017, http://www.eluniversal.com.mx/columna/luis-de-la-calle-pardo/cartera/para-enfrentar-trump-no-es-plan-b-sino-el .

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R AMóN RUNS a successful business in Mexico City moulding plastics for blister packaging. When the pandemic dented demand he found a new opportunity in making facial visors. Despite his acumen, Ramón (not his real name) does not want to expand his business. At his factory there is no sign and no window advertising his wares. “I don’t want to grow because I will be worse off,” he says. Not only will his tax rates jump from 2% of profits to 30%, he says, but he will attract attention from both trade unions and organised crime, which will charge derecho de piso —extortion.

Ramón’s story helps explain something that would otherwise be baffling: why the Mexican economy grows so slowly. Given its advantages, Mexico should be an engine of growth for Latin America. It shares a long land border with the United States. It is part of a free-trade area that lets Mexican industry integrate into North American supply chains. Thanks to abstemious fiscal policies, it has avoided the high inflation and debt that afflict South American economies like Argentina and Brazil. And yet over the quarter-century before the pandemic Mexico managed annual average growth in GDP per person, on a purchasing-power-parity basis, of just 2.8% (see chart). That was little better than Brazil, worse than Argentina and well short of the performance of stars like Chile and Panama.

This disappointing record looms larger after the brutal experience of the pandemic. In 2020 Mexico suffered its worst economic contraction since the great depression. Aggregate output shrank by 8.5%. Between 2018 and 2020 at least 3.8m people fell into poverty (according to a measure that takes into account access to services as well as income). That brought the poverty rate to almost 44%. The recovery is looking equally disappointing. Mexico’s economy contracted in the last two quarters of 2021. The IMF and Mexico’s central bank have revised down sharply their forecasts for growth in 2022 relative to earlier estimates, back to the usual 2-3% range.

essay about mexican economy

No single factor explains Mexico’s underperformance. “It’s like a good mole [a traditional sauce], with many ingredients,” quips Gordon Hanson of Harvard University. His work suggests that Mexico’s doldrums are at least partly due to bad luck. Although it experienced some success in building a manufacturing sector in the 1980s and 1990s—an effort that received a boost from the North American Free Trade Agreement starting in 1994—Mexico’s fortunes shifted after China joined the World Trade Organisation in 2001.

Thereafter, Mexico’s share of American imports dropped while China’s soared. China offered a much larger workforce at lower wages, making goods that were substitutes for those made in Mexican factories. Nonetheless, Mexico’s close economic ties to the United States meant that the latter’s housing bust and lacklustre recovery sapped Mexican growth. In 2009, for example, output across emerging markets as a whole rose by 2.8%, but in Mexico GDP contracted by 5.3%.

Yet even had Mexico been more fortunate, internal economic problems would probably have weighed on growth. Criminal groups can obstruct businesses or force them to pay for “security”, as Ramón’s experience shows. More mundane difficulties abound. Mexico ranked 60th of 190 countries in the World Bank’s ease-of-doing-business index (which ceased publication after 2020). It can be a struggle to get electricity. Paying taxes takes a whopping 241 hours per year on average for firms in the formal sector. More and better infrastructure is needed, especially in the poorer southern states that are disconnected from the global economy, says Valeria Moy, an economist who heads IMCO , a think-tank in Mexico City.

Formal businesses face red tape and high taxes in exchange for poor public services. That is why so many firms and employees stay informal. Almost 60% of the labour force and an even greater proportion of businesses do not pay the required taxes and social-insurance contributions. Often informal enterprises do not obey labour rules. Despite the large number who toil in it, the informal economy accounts for only about a quarter of Mexican GDP . That is because productivity in informal firms is well below that in the formal sector, and it may well be falling. “It is like the Middle Ages with no technical change,” says Santiago Levy, a former deputy finance minister now at the Brookings Institution, a think-tank in Washington.

Life for workers with informal jobs is not easy. In Nápoles, a neighbourhood of the capital, Iván Jiménez runs a fruit-and-vegetable stand. The hours are long. To open the stall for ten hours a day he works for 17 hours from 4am, when he buys stock. (Mexicans work more hours per year than citizens of any other member of the OECD , a club mainly of rich nations, bar Colombia.) Mr Jiménez says the buying power of his earnings has not risen in recent years.

Yet work in the formal sector is not necessarily more attractive. Salvador Trejo, who runs a produce stall in another part of the city, says he can’t afford the taxes that he would have to pay if he moved to the formal sector. Formal employment can mean gaining health insurance, but its benefits are often little better than those provided by health care that can be obtained for nothing. Public pensions do not always sweeten the deal, either. To earn one, until recently a labourer had to work in the formal sector for 25 years, an unachievable feat for anyone over a certain age. The current administration has reduced that requirement to around 15 years, but it has dulled the incentive by introducing grants for older people regardless of their income or employment status.

Although past reforms have improved the growth climate in many respects, few administrations have done much to shrink the informal sector, despite potential gains in the form of higher productivity and tax revenue. Even so, the economy has a strong foundation on which to build.

Mexico has long been an attractive destination for foreign direct investment. Although recent supply-chain problems have affected important industries, such as car-making, the economy could benefit over the long run from a lack of confidence in global supply chains, as American firms move production closer to home. Indeed, in the northern states, which are closely integrated with the United States, industries like aerospace manufacturing are booming. Mexico could enjoy annual growth of around 4%, reckons Mr Levy, if it became more business-friendly and invested in infrastructure. Parts of Mexico do grow at good rates. In 2018 and 2019, for example, the northern state of Baja California Sur grew at an average annual rate of 3.5%.

Opportunity knocked back

But the government of Andrés Manuel López Obrador is squandering the opportunity. In some ways it is making things worse than they were before the pandemic. A recent move to hand control of the country’s electricity market to the Comisión Federal de Electricidad, a state-owned utility, has discouraged foreign investment. The president has portrayed the private sector as greedy and rattled businesspeople by cancelling construction of an airport . “Currently, it is predominantly domestic issues holding back investment,” says Jonathan Heath, a deputy governor of Mexico’s central bank.

That is a shame. “Mexico is a country of opportunities, whether you sell tacos or something else,” reckons José, who runs a carpet-cleaning business. The biggest opportunity would come from boosting the highly productive formal sector. Unless the government does that, Mexico’s growth will remain mediocre. ■

This article appeared in the The Americas section of the print edition under the headline “Can’t grow, won’t grow”

The Americas March 19th 2022

  • Mexico’s new megaprojects may do more harm than good
  • Chile’s new president won from the left. Can he govern like that?

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A worker assembles aluminum panels for passenger jets at an aerospace industry assembly plant in Querétaro, Mexico: improving gender gaps in the country is vital for economic growth (photo: Benedicte Desrus/Sipa USA/Newscom)

A worker assembles aluminum panels for passenger jets at an aerospace industry assembly plant in Querétaro, Mexico: improving gender gaps in the country is vital for economic growth (photo: Benedicte Desrus/Sipa USA/Newscom)

  • IMF Country Focus

Mexico's Economic Outlook in Five Charts

November 8, 2018

Mexico's economy grew moderately this year, supported mainly by domestic demand, with growth projected at 2.1 percent for 2018, the IMF said in its latest annual economic assessment.

Related Links

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  • Latin America's economic outlook
  • Mexico and the IMF

  Here are five charts that tell the story. 

<img alt=

Mexico Economic Snapshot

The snapshot offers a concise summary of Mexico's economic trends and prospects, drawing from the OECD Economic Survey, Economic Outlook, and Economic Policy Reform: Going for Growth reports, delivering in-depth analyses of economic trends, suggested policy recommendations, alongside an overview of structural policy developments.

  • Latest projection note
  • Latest structural reform note

essay about mexican economy

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Latest economic survey of mexico (february 2024).

After a slow recovery from the pandemic, the Mexican economy has navigated well the global environment of tightening financial conditions and heightened uncertainty. Fiscal policy has a robust track record in attaining fiscal targets and keeping public debt low. Higher tax revenues would allow to maintain fiscal prudence and to address important spending needs in productivity enhancing areas, such as education, infrastructure, the digital and green transitions, and the fight against corruption and crime. Mexico has large potential to attract investment from companies looking to relocate their operations to North America. This is also a significant opportunity to spread the benefits of trade throughout the country and to create more and better value chain linkages. 

Further reading

  • From Playgrounds to Growth: Bolstering early education in Mexico  |  Blog post
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OECD Economic Outlook: OECD Economic Outlook, Volume 2021 Issue 2:

  • Disclaimers
  • Tables and Graphs
  • Acknowledgements
  • Editorial: A balancing act
  • Introduction
  • The recovery remains uneven
  • A continued recovery is likely
  • Key risks and vulnerabilities
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The economy is projected to expand by 3.3% in 2022 and by 2.5% in 2023, after growing by 5.9% in 2021. Exports will continue to benefit from the strong recovery in the United States. Consumption will be supported by the gradual improvement in the labour market and the increasing share of the population who are vaccinated. Investment will benefit from planned infrastructure projects. Inflation will edge down, after the significant increase in 2021.

If the recovery falters or the pandemic resurges, spending on social protection and public investment should increase further and the planned gradual reduction of the fiscal deficit be delayed. Monetary policy should gradually tighten further if inflation does not converge to the 3% target. Improving business regulations at sub-national level, by lowering administrative burdens and monetary costs for starting and formalising companies, would help to raise private investment and formal job creation.

The recovery has broadened

Activity has trended up in agriculture, industry and services. The latter displays some heterogeneity, with the recovery in high-contact sectors, such as leisure and hospitality, lagging behind while activity in some other sectors is above pre-pandemic levels. Tourism, an important source of jobs and revenues for several regions, is 27% below pre-pandemic levels. Consumption is 3% below its pre-pandemic level while investment is recovering more slowly, remaining 7% below its pre-pandemic level. The vaccination campaign is progressing steadily, but with significant heterogeneity across regions. As of mid-November, 58% of the population had received at least one dose and 49% are fully vaccinated. Inflation has increased significantly. Given Mexico’s high integration in global value chains, global inflation and supply-chain cost disruptions are exerting significant pressure on both headline and core inflation. Domestic factors, such as the recovery in the demand for some services, and additional upward pressures on some food and energy prices are fuelling inflation. The labour market is gradually recovering. The standard unemployment rate, at 4.2%, is 0.8 percentage points above the level of late 2019. The rate jumps to 27% when considering also the population that remains outside the labour force and would accept a job and those who would like to work more hours.

Mexico: Economic activity and inflation indicators

1. The grey shaded area represents the Central Bank of Mexico's inflation target range.

2. Inflation expectations for the next 12 months by specialists in the economy of the private sector.

Source: INEGI; and Bank of Mexico.

  StatLink  https://stat.link/r4k7iz

   https://stat.link/wfe31u

Fiscal policy has become more supportive and monetary policy started to tighten

The fiscal stance, while remaining cautious, is less restrictive than foreseen in the 2021 budget, mildly supporting the ongoing recovery. The budget deficit is expected to increase to 3.4% of GDP in 2021 (from 2.9% of GDP in 2020), remain broadly unchanged in 2022 and decrease thereafter. The official measure of public debt is expected to stabilise around 51% of GDP. Mexico’s tax-to-GDP ratio is the lowest in the OECD and lower than that of regional peers. Responding to increasing spending needs in education, health or social protection, while maintaining the commitment to debt sustainability, would require increasing tax revenues. This could be achieved by broadening tax bases, phasing out inefficient and regressive exemptions, and strengthening the property tax, once the recovery is well-established.

The Central Bank of Mexico reduced policy rates by 325 basis points after February 2020 to support the recovery and provided large liquidity and credit facilities. As inflation significantly increased, the central bank appropriately raised policy rates by 25 basis points in its June, August, September and November meetings, bringing the policy rate to 5%. It is assumed that the rate will increase further to 5.25% by end-2021. If price pressures continue and inflation does not converge gradually to the 3% target, additional interest rate increases would be warranted.

The recovery will continue

The economy is projected to expand by 3.3% in 2022 and by 2.5% in 2023. With an increasing share of the population vaccinated and the improvement in the labour market, consumption will be a key growth driver. Exports will continue to benefit from deep integration into value chains. Inflation is expected to slow gradually in 2022 and 2023, as the effects of monetary policy tightening kick in, supply disruptions abate and ample spare capacity limits wage pressures. However, the inflation outlook remains very uncertain and subject to risks. Inflation may be higher for longer than anticipated, eroding purchasing power, particularly of vulnerable households, and requiring a larger tightening of monetary policy than projected, which would weaken the recovery. If infections significantly increase, restoring containment measures would be needed, hampering economic activity. Episodes of financial volatility in other emerging-market economies may trigger greater risk aversion, reduce net financial inflows and increase Mexico’s financing costs. On the upside, if growth in the United States is stronger than anticipated, exports and job creation could be more robust. Supply-chain integration could deepen further, due to the updated trade agreement with the United States and Canada. The recovery in tourism could be stronger than anticipated, boosting job creation in some regions.

Rebooting investment and boosting productivity are key priorities

Expanding access to financial services, by boosting competition in financial markets and expediting the legal enforcement of contracts, would enable SMEs to invest more, grow and increase productivity. Improving access and the quality of childcare would increase female labour force participation and reduce educational inequalities. Allocating more resources towards primary education would mitigate the adverse effects of the pandemic on educational outcomes and long-term growth. Transitioning towards massive urban and inter-urban transport could substantially reduce traffic congestion and emissions.

This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Members of the OECD.

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Note by Turkey The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.

Note by all the European Union Member States of the OECD and the European Union The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.

Photo credits: Cover © AUUSanAKUL/Shutterstock.com.

Corrigenda to publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm .

© OECD 2021

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at http://www.oecd.org/termsandconditions .

The Mexican Economy, 1870-1930: Essays on the Economic History of Institutions, Revolution, and Growth

Jeffrey L. Bortz,  Stephen Haber

The Mexican Economy, 1870-1930: Essays on the Economic History of Institutions, Revolution, and Growth

Until the last decades of the nineteenth century, Mexico faced the twin problems of chronic political instability and slow economic growth. During the period of the Porfirio Díaz dictatorship (1876-1911), however, a series of institutional reforms reignited growth and created rents that enabled the Díaz government to threaten its opponents with military force or to buy them off. These institutional reforms came out of distinctly political processes, which often had to be brokered among multiple groups of economic elites and regional political bosses. Therefore, they were often structured to encourage investment by specifying property rights or creating streams of rents for particular entrepreneurs. In short, Porfirian Mexico is an excellent natural laboratory in which to investigate not only how institutional change can foment economic growth, but also how specific features of political institutions give rise to specific economic institutions that have both positive and negative effects on growth and distribution. In fact, the distributional consequences of the Porfirian regime gave rise to the Mexican Revolution of 1910-1917, which produced a further round of dramatic changes in Mexico’s political institutions. These changes, in turn, restructured the institutions that governed property rights and those that determined the allocation of rents generated by property rights. This book aims both to identify the crucial institutions and to measure their economic effects. In addressing these issues, the contributors to this volume employ theoretical insights from the New Institutional Economics and statistical hypothesis-testing as well as traditional archival methods. Thus, in addition to advancing the field of Latin American economic history by studying the interaction of political and economic institutions during the period 1870-1930, the book also makes a methodological contribution by using analytic tools not previously employed in the literature.

Mexico: a Magnet of Opportunities and Rich Cultural Tapestry

How it works

In the big picture of global migration, Mexico really stands out as a cool place to move to. It’s got this amazing mix of culture, growing job opportunities, and a fun way of life. Folks usually think of Mexico as a place people leave, but it’s also a great spot for people to come to. Let’s talk about why Mexico is such a draw.

  • 1 Economic Growth and Opportunities
  • 2 Cultural Richness and Historical Depth
  • 3 Quality of Life and Lifestyle
  • 4 Strategic Importance and Connectivity
  • 5 Conclusion

Economic Growth and Opportunities

Mexico’s economy is growing fast, and that’s a huge pull for folks looking for new jobs or starting businesses.

Over the past few years, Mexico’s become one of the biggest economies in Latin America. It’s got a mix of different industries. The manufacturing sector is doing especially well, thanks to being right next to the U.S. and being part of global supply chains. The car and electronics industries are booming, offering tons of jobs for skilled workers.

On top of that, Mexico’s startup scene is really taking off. Cities like Mexico City, Guadalajara, and Monterrey are buzzing with tech startups. There’s a growing network of investors and incubators helping out. The government is also backing innovation and entrepreneurship, making Mexico a great place for professionals looking for exciting career opportunities.

Cultural Richness and Historical Depth

Besides the economic stuff, Mexico’s rich culture and history are big reasons why people are drawn here. The country’s culture is a mix of indigenous, Spanish, and Afro-Caribbean influences, which makes for a unique and lively cultural vibe. This diversity shows up in its festivals, food, music, and art. Events like Día de los Muertos (Day of the Dead) and the Guelaguetza festival give deep insights into Mexico’s traditions, attracting cultural fans and researchers.

Mexico’s historical sites and natural beauty are another big draw. Places like Teotihuacan, Chichen Itza, and Palenque aren’t just old ruins; they’re glimpses into ancient civilizations. The colonial cities like Guanajuato and San Miguel de Allende, with their charming buildings and lively arts scenes, offer a mix of history and modern culture. For those who love diving into culture and history, Mexico is a treasure trove.

Quality of Life and Lifestyle

Living in Mexico also promises a great lifestyle. The cost of living is pretty low compared to many Western countries, which is great for retirees, digital nomads, and expats. The healthcare system is good too, with plenty of affordable, high-quality medical facilities.

The lifestyle in Mexico is friendly and community-oriented. The people are warm and welcoming. Whether you like the hustle and bustle of Mexico City, the peaceful beaches of the Yucatan Peninsula, or the scenic highlands of Oaxaca, there’s something for everyone. And let’s not forget the food! Mexico’s culinary scene is famous worldwide for its variety and flavor, making everyday dining an adventure.

Strategic Importance and Connectivity

Mexico’s location is another big plus. Being close to the U.S. and acting as a bridge between North and South America makes it a key spot for business and travel. The country has a well-developed network of airports, seaports, and highways, making it easy to get around both internationally and domestically. This connectivity is great for businesses looking to expand and for folks who love to travel.

Mexico is also involved in international trade agreements like the United States-Mexico-Canada Agreement (USMCA), which boosts its economic prospects and makes it a good place for international business and investment. For companies and professionals aiming for global markets, Mexico is a strategic choice.

In the end, Mexico is a great place for migrants for many reasons—economic opportunities, rich culture, a good lifestyle, and strategic importance. Its growing economy offers plenty of chances for work and business. The cultural and historical richness provides endless exploration. The quality of life is high, with affordable living and great healthcare. And its strategic location makes it a key player in global trade. All these factors make Mexico a place full of opportunities and a fulfilling life.

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Mexico Economic Update

Mexico’s economy softens in the second quarter August 2024

Mexico’s economy continues growing through second quarter June 2024

Mexico’s economy improves in the first quarter of 2024 May 2024

Mexico’s economy shows early signs of slowing April 2024

Mexico’s economy shows mixed signals toward end of 2023 January 2024

Mexico’s economy grows for eighth straight quarter; outlook continues improving November 2023

Mexico’s economic momentum continues; outlook improves October 2023

Mexico’s economic momentum continues in second quarter August 2023

Mexico’s economic growth continues; outlook improves, inflation moderates further June 2023

Mexican economy picks up steam in first quarter May 2023

Mexico’s economic growth continues, inflation moderates April 2023

Mexico’s economic growth slows in fourth quarter; outlook weakens January 2023

Mexican economy sends mixed signals toward year-end December 2022

Mexico’s economy grows for fourth straight quarter; outlook improves November 2022

Mexico’s economy slightly improves; outlook deteriorates October 2022

Mexico’s economy grows for third straight quarter; outlook improves August 2022

Mexico’s economic growth continues; outlook remains unchanged July 2022

Mexico’s economic growth picks up, but outlook weakens May 2022

Mexico’s economy picks up at start of 2022 March 2022

Mexico’s economy contracts at end of 2021 February 2022

NOTE: Issues of Mexico Update before 2020 are available on FRASER , the Federal Reserve's economic history archive.

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Trump vows to 'take other countries' jobs' in economic speech

essay about mexican economy

Donald Trump pledged the US would “take other countries’ jobs” if he returned to the White House, as he laid out his plans to slash taxes and lower energy costs and regulations for manufacturers that made goods on US soil.

At a campaign rally in Savannah, Georgia, Trump promised a "manufacturing renaissance", reiterating his pledge to punish American companies that manufactured outside the US, and slap large tariffs on foreign-made goods to protect US industries.

Trump and Vice-President Kamala Harris have stepped up efforts to outline their competing visions for the economy in the final stretch of the campaign, highlighting what voters say is a top concern in the 2024 election.

Harris is expected to unveil a new set of economic proposals in a major speech in Pittsburgh, Pennsylvania, on Wednesday.

Speaking to a crowd in Savannah, Trump moved beyond his usual protectionist policies to raise the prospect of more trade battles.

Trump said he would offer special federal zones with "ultra low taxes and regulations" to companies that relocate to the US, cut through regulation and appoint a "manufacturing ambassador" to convince international companies to move to the United States.

“Under my plan, American workers will no longer be worried about losing your jobs to foreign nations. Instead, foreign nations will be worried about losing their jobs to America,” he said.

Trump has also previously proposed a 60% tariff or higher on Chinese goods and a blanket 20% tariff on imports from other countries, an aggressive policy that could increase prices for Americans, according to some economists.

During his presidency, Trump imposed tariffs on some goods imported from China. The Biden administration has left some of these policies in place and announced new restrictions in some areas such as electric vehicles.

The former president has sought to blame Democrats for the surge in inflation following the Covid pandemic, which has since cooled, as well as the high cost of groceries.

The food Consumer Price Index rose by 25% from 2019 to 2023, according to the US Department of Agriculture .

Polls have indicated that American voters are most concerned about the economy, and more voters see Trump as equipped to handle it. Harris, however has made some gains.

Voters for whom the economy was a major factor preferred Trump over Harris by 53-47%, according to CBS News/YouGov poll of likely voters published this week. But Harris has improved her standing since August, when only 43% of voters who prioritised the economy favoured her.

Trump’s visit to Georgia came on the heels of a New York Times/Siena College poll that found him slightly ahead in the state, as well as the battlegrounds Arizona, and North Carolina.

Both candidates have devoted significant time and resources to campaigning in Georgia, as it may prove critical to their paths to the White House.

Though the Georgia speech was billed as an economic event, Trump dedicated a significant portion of his speech to other subjects. He recounted the failed assassination attempt on his life at a Pennsylvania rally in July and the second suspected attempt in Florida this month. He praised the US Secret Service, which has faced scrutiny over their ability to protect Trump.

He also attacked Harris, calling her "grossly incompetent" and said she would "deindustrialise the United States and destroy our country".

An hour before Trump spoke in Georgia, the Harris campaign held a press call with American investor Mark Cuban, who has long supported Democratic candidates.

Mr Cuban assailed Mr Trump’s proposals to place tariffs on American companies which manufactured in countries like Mexico, saying it would harm American businesses.

“It just goes to show that he doesn't think these things through,” Mr Cuban said.

Harris will return to the another critical swing state, Pennsylvania, on Wednesday to lay out her own economic agenda.

The vice-president has already released a set of economic proposals aimed at first-time home buyers, tax breaks for families and a ban on grocery "price-gouging". She has called for a "first-ever" tax credit for builders of homes sold to first-time buyers, as well as up to $25,000 in down-payment assistance for "eligible" first-time buyers.

She told reporters on Sunday the plan would focus on investing "in the aspirations and ambitions of the American people while addressing the challenges that they face".

Is US economy better or worse now than under Trump?

More china tariffs if re-elected, trump says.

Perry Preschool at 50: What Lessons Should Be Drawn and Which Criticisms Ignored?

The Perry Preschool Project, the longest-running experimental study of an early childhood education program, demonstrates how such interventions can yield long-term personal, societal, and intergenerational benefits for disadvantaged populations. The evidence is clear: investments in high-quality early childhood education and parental engagement can deliver returns even 50 years later. The program’s findings remain scientifically robust, particularly when analyzed through rigorous small-sample inference methods. The program’s findings also contradict common criticisms of preschool, as, when measured correctly, treatment effects on IQ do not fadeout. This paper draws insights from both the original founders and recent empirical studies, emphasizing the critical role of parental involvement in early education. The authors advocate for a scientific agenda focused on understanding the mechanisms behind treatment effects, rather than replicating specific programs. The analysis also underscores the broader implications of early childhood interventions for social mobility and human capital formation. Analysts of early childhood education should recognize that although credentials and formal curricula contribute to successful programs, the true measure of quality lies in adult-child interactions, which play an essential role.

This research was partly supported by NIH grants NICHD R37HD065072 and R01HD103666. The Midlife data were collected by the National Opinion Research Center (NORC) under NIA R01AG042390. We thank the HighScope Educational Research Foundation, especially Alejandra Barraza, Fernando Andrade-Adaniya, Jeff Beal, Madeline Chimka, Jill Claxton, Cheryl Polk, Lawrence Schweinhart, and Tomoko Wakabayashi, for collaboration, and access to study data and source materials. Years of partnership and collaboration have made this work possible. We thank Sylvi Kuperman for interviewing many study teachers and staff, sourcing archival study material, and comments on this chapter. We write in memory of Dr. Seong Moon, who lead the 2010 cost-benefit analysis of Perry. The views expressed in this paper are solely those of the authors and do not necessarily represent those of the funders, partners, the official views of the National Institutes of Health, or those of the National Bureau of Economic Research.

MARC RIS BibTeΧ

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A Looming East Coast Port Strike Could Shake the Economy

Businesses are preparing for a strike by dockworkers on the East and Gulf Coasts, which could begin Oct. 1 if negotiations don’t yield a new contract.

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Cargo containers and cranes at a port.

By Peter Eavis

With dockworkers on the East and Gulf Coasts threatening to strike on Oct. 1, businesses have been accelerating imports, redirecting cargo and pleading with the Biden administration to prevent a walkout.

Some importers started ordering Christmas goods four months earlier than usual to get them through the ports before a labor contract between the operators of port terminals and the International Longshoremen’s Association expires next Monday.

Many shipments have been diverted to West Coast ports, where dockworkers belong to a different union that agreed to a new contract last year . The ports of Long Beach and Los Angeles say they are handling at least as many containers as they did during the pandemic shipping boom of 2021-22.

Despite those measures — and all the problem-solving skills that supply chain managers developed during the turbulence of recent years — a short strike could lead to significant disruptions. JPMorgan transportation analysts estimate that a strike could cost the economy $5 billion a day, or about 6 percent of gross domestic product, expressed daily. For each day the ports are shut down, the analysts said, it would take roughly six days to clear the backlog.

Chris Butler, the chief executive of the National Tree Company, which sells artificial Christmas trees and other decorations, said his company had brought in goods early and made greater use of West Coast ports. But he estimated that 15 percent of his goods would still be stranded by a port strike.

“I’m very unhappy,” said Mr. Butler, who is based in northern New Jersey. “We’re doing everything we can to mitigate it. But there’s only so much you can do when you’re at the mercy of these ports.”

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