Monday, March 4, 2024

Mexico is now the 12th largest economy in the world

Mexico is now the 12th largest economy in the world, according to International Monetary Fund (IMF) GDP projections for 2023, an improvement of two positions compared to last year.

The IMF updated its nominal GDP forecasts earlier this month, and is now predicting that Mexico’s economic output will be US $1.81 trillion this year.

Lázaro Cárdenas port in Michoacán
Mexico’s strong exports this year have contributed to GDP growth. (Cuartoscuro)

Based on that projection, Mexico is the 12th largest economy in 2023 behind the United States (No. 1), China, Germany, Japan, India, the United Kingdom, France, Italy, Brazil, Canada and Russia.

Mexico’s nominal GDP was $1.47 trillion last year, making it the 14th largest economy in the world. This year, it passed South Korea and Australia to become the 12th largest economy, according to the IMF data.

The federal government highlighted the improvement in a post to its official account on the X social media platform on Thursday.

“Mexico is among the 20 largest economies in the world. We are ranked 12th and moved up two places with respect to last year,” the post said.

Steel manufacturing plant
Mexico’s manufacturing sector has seen strong FDI and export revenue this year. (Deacero Ramos Arizpe)

Contradicting that comment, the post included a graph that said that Mexico had moved up four places compared to 2022, as was widely, albeit erroneously, reported.

The Mexican economy has had a better than expected year in 2023. The national statistics agency INEGI reported Friday that the economy grew 3.5% in annual terms between January and October.

The OECD predicted in November 2022 that the Mexican economy would grow by just 1.6% this year, but is now forecasting that GDP will expand 3.4% in 2023.

Exports and investment in Mexico – both from abroad and within the country – have spurred the economy this year. The latter, which includes government spending on infrastructure projects, has been a particular boon for Mexico’s construction industry.

Foreign investment, which totaled almost $33 billion in the first nine months of the year, is expected to increase in coming years as more companies move into the country as part of the nearshoring phenomenon. Foreign companies announced investments in Mexico totaling US $106 billion in the first 11 months of the year, with that money expected to flow into the country in the next two to three years.

The publication of the IMF data showing that Mexico had become the 12th largest economy in the world came five months after President López Obrador noted that the country was forecast to become one of the world’s top 10 economies in the coming decades.

Professional services firm PricewaterhouseCoopers predicted in 2017 that Mexico will be the 7th largest economy in the world in 2050.

The IMF’s projections currently go out to 2028.

The Washington D.C.-based financial agency is forecasting that Mexico will pass Russia to become the 11th largest economy next year and remain in that position in 2025, 2026, 2027 and 2028.

Mexico’s nominal GDP is projected to reach $1.99 trillion in 2024, $2.08 trillion in 2025, $2.17 trillion in 2026, $2.26 trillion in 2027 and $2.36 trillion in 2028.

Mexico News Daily 

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