What's Happening?
Mexico ranks among the world's largest economies, with a strong manufacturing base and open trade policies. Despite this, the country has underperformed in growth, inclusion, and poverty reduction compared to similar nations. Economic growth averaged just over 2% annually from 1980 to 2022. However, poverty rates have decreased due to labor market improvements and minimum wage increases. Economic growth is projected to stall in 2025, with gradual recovery expected by 2027, influenced by trade policy uncertainties and a slowing U.S. economy.
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Why It's Important?
Mexico's economic performance impacts its ability to compete globally and improve living standards. The slow growth rate challenges efforts to close the gap with high-income economies. Addressing these issues requires strategic investments in infrastructure and private sector engagement. The anticipated trade policy shifts and U.S. economic slowdown could affect Mexico's export-driven economy. Policymakers and business leaders must navigate these challenges to sustain economic growth and reduce poverty.
