Mexico has fallen to its lowest position ever on an annual index that measures the competitiveness of 63 economies around the world.
Mexico placed 51st in the IMD World Competitiveness Rankings 2018, three spots lower than its 2017 ranking and its worst result since the Swiss business school first included Mexico in its ratings in 1997.
“Mexico drops to 51st as a result of the worsening of perceptions about the quality of institutions and business legislation such as the ease of doing business, and some aspects of corporate governance,” IMD said.
Among the challenges Mexico faces in 2018, the school said, is to “improve the business environment through a better election of president to improve justice and security.”
It also said that Mexico needs to improve its relationship with the United States and other relevant economies, continue implementing structural reforms on education and energy, promote higher GDP growth by promoting internal market growth and promote higher investment in public infrastructure and housing.
In 2012 — the final year of former president Felipe Calderón’s administration — Mexico ranked 37th among 59 countries on the competitiveness index.
The following year, expectations surrounding Enrique Peña Nieto’s proposed structural reforms helped Mexico rise a further five positions to 32nd place.
But that was as high as Mexico’s ranking would go during Peña Nieto’s six-year term and the latest result follows a downward trend that has continued for three consecutive years.
Among the subsets of the four key areas used to determine the rankings — economic performance, government efficiency, business efficiency and infrastructure — Mexico scored best on employment (17th) and international investment (20th).
Its worst results came in education (62nd), international trade (60th) and societal framework (56th).
In a survey conducted as part of the ranking process, Mexico also scored well for its cost competitiveness and skilled work force but was let down by poor perceptions on the competency of government and its research and development culture.
Among other points IMD analyzed, strengths identified in the Mexican economy were working hours, cost of living and youth unemployment rates, for which it ranked first, fifth and eighth respectively.
It also ranked among the top 10 countries for the presence of large corporations (ninth), unemployment rate, social security contribution rate, compensation levels and remuneration in service professions (all 10th).
In contrast, Mexico was rated 62nd, or second last, for bribery and corruption, the existence of an informal economy and pollution problems.
Other weaknesses included transparency (61st), attracting and retaining talent, personal security and private property rights (both 60th), and pupil-teacher ratio for secondary schools and justice (both 59th).
The top five improvements compared to last year’s results came in government budget surplus/deficit, current account balance, student mobility, mobile telephone costs and exchange rate stability.
On the other hand, real growth, consumer price inflation, a parallel economy, bribery and corruption and ICT service exports experienced the biggest declines.
Overall Mexico ranked fourth in the Americas behind the United States (first), Canada (10th) and Chile (35th).
Following the United States were Hong Kong, Singapore, the Netherlands and Switzerland.
Venezuela was ranked the least competitive economy followed by Mongolia, Croatia, Brazil and Ukraine.