Mexico | The arithmetic of Mexico's relatively low GDP growth per capita

Summary

Uncertainty over US trade policy and implementation of the judicial reform are two factors that are holding back investment and economic growth. Nevertheless, the problem of low economic growth is not new.

Key points

• Key points:
• Using data from the Penn World Table version 10.01, Mexico showed low GDP growth per capita between 1950 and 2019 compared to 26 OECD countries for which data exist since 1950.
• The compound annual growth rate for GDP per capita between those years was 1.9%, placing Mexico in second-to-last place. The average of this rate for the 27 OECD countries was 2.7%.
• The low growth in GDP per capita could not only be due to the economic crises of the 1980s and mid-1990s. In the era of macroeconomic stability, Mexico's GDP per capita grew 1.7% at a compound annual rate between 1997 and 2019.
• At this rate, Mexico ranked 30th out of 38 OECD countries and it would take the country 41 years to double its GDP per capita level. The average of this rate was 2.4% for all OECD countries.
• For the most recent sample analyzed, the lower relative performance of GDP per capita in Mexico is explained by the greater relative growth of its population.

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