The Mexican economy and growth prospects in 2024
A driving force in Southeast Asia
From 2020 to 2022, Mexico showed impressive resilience and growth, effectively rising to the challenges posed by the pandemic. During this period, and particularly in its tropical regions, the country benefited from the boom in telecommuting and digital nomads, welcoming more and more Americans looking for a more comfortable setting. Today, this dynamism makes the country all the more competitive on the international scene.
A diversified economy with key assets
Mexico possesses a number of key assets that contribute to its resilience, and make the country a destination with a diversified economy conducive to foreign investment.
- Industrial diversity: Mexico has a diversified manufacturing base, with strong industries in the automotive, aerospace and electronics sectors in particular.
- Robust agriculture: Agriculture plays an important role in the Mexican economy, with the country being a major producer of products such as corn, avocados, tomatoes and limes.
- Significant natural resources: Mexico has strategic natural resources, ranking 13th in oil production by 2022. Other resources include silver, copper and natural gas.
- World tourist destination: The tourism sector is a pillar of the economy, attracting millions of visitors every year thanks to its beaches, cultural and historical sites, and popular destinations such as the Riviera Maya and Cancún.
- Strategic geographic location: Located between North and Central America, Mexico enjoys an advantageous geographic position for trade and exports, thanks in particular to its access to North and Latin American markets. This position below the USA also allows it to benefit from a significant flow of tourists and digital nomads.
Government infrastructure development projects
The Mexican government is working to develop its infrastructure, such as railroads and airports. Key infrastructure projects include the “Tren Maya”, aimed at building a rail network that will link several key cities on the Yucatan peninsula and on the Riviera Maya, including Cancun and Tulum.
The $8 billion project aims to boost tourism and investment in the region, making it easier to travel between tourist towns and increasing the number of visitors.
The new Tulum airport, another development project, also welcomed its first flight in December 2023. Its aim is to make the Riviera Maya’s most popular tourist regions ever more attractive and accessible to international visitors.
Planned itinerary for the new Riviera Maya train project
Growth prospects for 2024
The economic outlook for 2024 is promising. The Organisation for Economic Co-operation and Development (OECD) has revised upwards its growth forecasts for Mexico, estimating GDP growth of 2.5% for the year.
Factors contributing to this positive growth include the strength of the Mexican labor market, infrastructure spending by the federal government and record inflows of remittances. These elements, combined with solid macroeconomic institutions and openness to trade, have helped to stabilize and stimulate the Mexican economy.
In short, the Mexican economy is entering a period of positive transition, supported by a diversified industrial base and strong links with the global economy, particularly with the United States. This stable growth offers encouraging prospects for Mexico’s economic future.
Sources: World Bank, El Pais, Mexico News Daily, International Trade Administration.
