Latin American Economic Outlook 2021

Mexico

1. Socio-economic and perceived impacts of the coronavirus (COVID-19) pandemic

Mexico has been hard hit by the COVID-19 pandemic. In 2020, gross domestic product (GDP) contracted by slightly more than 8%. The COVID-19 crisis also worsened the income conditions of the most disadvantaged populations, increasing poverty by nine percentage points and extreme poverty by almost eight percentage points based on latest international comparable estimations. Income inequality was already high before the pandemic (around 0.48), as it was in the Latin America and the Caribbean (LAC) region (0.46), and had been stable in the last decade. Between March 2020 and May 2021, schools were fully closed for 53 weeks, compared to the averages of 26 weeks in LAC and 15 weeks in Organisation for Economic Co-operation and Development (OECD) countries. Effective online learning was present in only 33.8% of schools, close to LAC (32.5%) but much lower than the OECD (54.1%).

Public expenditures on health decreased by 0.5 percentage points in the last decade. Before the pandemic, in 2017, they stood at 5.5% of GDP, lower than in LAC (6.8%) and the OECD (8.8%). According to Gallup data, 50.5% of people were satisfied with the public provision of health care in 2020, almost 12 percentage points less than in 2009. This figure is slightly higher than the LAC average (48.2%) but lower than the OECD average (70.7%). In 2018, the latest available year, more than 90% of Mexicans thought that their country is governed in the interests of a few powerful people, one of the highest proportions in LAC (82%).

2. National and international co-operation initiatives aimed to build forward better

Before the COVID-19 crisis, Mexico was already focusing on well-being policies aimed at developing a universal model of social rights. Mexico’s conditional cash transfer programmes particularly stand out. However, many poor families still do not benefit from social assistance. On 1 May 2020, the government undertook a constitutional reform that expanded social programmes to address the crisis consequences. COVID-19 relief measures for households mainly came in the form of cash transfers. These included the delivery of bimonthly pension support to the elderly (Programa Pensión para el Bienestar de las Personas Adultas Mayores) and people with permanent disabilities (Programa Pensión para el Bienestar de las Personas con Discapacidad Permanente). Concerning firms, low-cost loans and payment deferrals were made available to small and medium-sized enterprises in both the formal and informal sectors.

Going forward, Mexico aims to overcome the obstacles that currently inhibit social inclusion, advancing in tackling poverty and inequality. Mexico is committed to the execution of comprehensive interventions aimed at guaranteeing the social rights already established in the constitution. This structural transformation will also create opportunities for the development of human capital and productivity.

The COVID-19 pandemic was at the core of Mexico’s international co-operation projects both within and beyond the region. The priority was given both to immediate needs, with a special focus on assisting LAC neighbour countries, and to measuring the socio-economic impact of the crisis to implement better policies in the medium and long term. Within LAC, Mexico’s co-operation efforts were characterised by support and assistance to neighbours. They include the donation of medical ventilation devices to Central America and the Caribbean countries and, in collaboration with Argentina, the production and distribution of the Astra-Zeneca vaccine in the region, as well as co-operation to facilitate administration and approval of the Sputnik V vaccine. Mexico also participated in an initiative for adaptation and resilience to climate change in the Caribbean (Mexico-Caribbean Community-Food and Agriculture Organization), an initiative for strengthening food security (Mesoamérica Sin Hambre), and the implementation of a platform to reinforce the tourism sector through virtual training with the countries of the Pacific Alliance. Beyond LAC, within the framework of the EUROsociAL+ co-operation programme with the European Union, support has been provided to promote employment for vulnerable populations. EUROsociAL+ has also supported policies aimed to protect migrant children and adolescents in the context of the Mexico-Guatemala Binational Border Strategy.

 

	Key indicators – Mexico1
Socio-environmental	Mexico		LAC2		OECD3
	2019	2020	2019	2020	2019	2020
Extreme poverty4	10.6	18.3	8.1	10.0	N/A	N/A
	2019	2020	2019	2020	2019	2020
Poverty5	41.5	50.6	26.8	30.9	N/A	N/A
	2009	2019	2009	2019	2009	2018
Gini index6	0.51	0.47	0.50	0.46	0.31	0.31
	Bottom 20%	Top 20%	Bottom 20%	Top 20%	Bottom 20%	Top 20%
Total population in informal households by quintile, 20187	70.9	17.4	78.0	19.1	N/A	N/A
	2010	2017	2010	2017	2010	2017
Health expenditures8	6.0	5.5	6.5	6.8	8.1	8.8
	2010	2017	2010	2017	2010	2017
Out-of-pocket health expenditures9	45.7	41.3	35.6	34.1	20.2	20.6
	03/2020-05/2021
Weeks of full school closure10	53		26		15
	2018
Effective online learning11	33.8		32.5		54.1
	2018
Effective online learning in disadvantaged schools11	12.7		21.5		48.8
	2009	2019	2009	2019	2009	2019
Share of Internet users12	26.3	70.1	29.3	67.8	68.3	85.8
	2015	2018	2015	2018	2015	2018
Number of students per computer13	2.2	2.4	2.4	1.6	1.8	1.1
	2010	2019	2010	2019	2010	2019
Exposure to PM 2.514	21.5	20.1	18.1	18.0	15.7	13.9
	2000-16
% change in intact forest landscape15	-4.6		-8.8		-6.3
Competitiveness and innovation	Mexico		LAC2		OECD3
	2009	2019	2009	2019	2009	2019
Labour productivity16	46.6	47.4	29.3	26.7	72.2	70.7
	2009	2019	2009	2019	2009	2019
High-tech exports17	22.7	20.4	8.7	8.3	19.5	17.9
	2009	2017	2009	2017	2009	2017
R&D expenditures18	0.5	0.3	0.4	0.4	2.4	2.5
	2009	2017	2009	2017	2009	2017
ICT patents19	132	199	726	521	173 440	141 358
Citizens’ perceptions and institutions	Mexico		LAC2		OECD3
	2009	2020	2009	2020	2009	2020
Citizens’ perceptions of corruption in government20	73.2	77.2	72.0	72.4	67.5	58.8
	2009	2018	2009	2018	2009	2018
Citizens’ perceptions of country governed in the interests of few21	78.3	90.5	64.8	82.0	N/A	N/A
	2009	2020	2009	2020	2009	2020
Satisfaction with health care22	62.1	50.5	56.9	48.2	69.2	70.7
	2009	2020	2009	2020	2009	2020
Satisfaction with water quality23	74.1	77.3	74.8	76.0	77.9	79.4
	2010	2016	2010	2016	2010	2016
% of people victim of criminality24	25.9	30.7	19.6	23.8	N/A	N/A
	2021
Rank in the Press Freedom Index25	143		82		36
	2009-18
Change in political polarisation26	-1.0		9.6		N/A
	2019
SIGI index27	29.0		25.6		16.3
Fiscal position	Mexico		LAC2		OECD3
	2009	2019	2009	2019	2009	2019
Total tax revenues28	12.5	16.5	20.6	22.9	31.6	33.8
	2009	2019	2009	2019	2009	2019
Share of VAT in total revenues29	26.9	24.3	25.3	27.7	19.8	20.7
	2009	2018	2009	2018	2009	2018
Social expenditures30	9.4	8.7	11.3	11.4	21.0	19.7

Sources, footnotes and technical details can be found at the end of the country notes.



1. As best as possible, the table follows the key areas identified in Latin American Economic Outlook 2021: i) socio-environmental aspects; ii) economic competitiveness and innovation; iii) citizens’ perceptions and institutions; and iv) fiscal position.

2. Latin America and the Caribbean (LAC) average is a simple average of the largest set of LAC countries for which data are available in the latest year.

3. Organisation for Economic Co-operation and Development (OECD) average is a simple average that includes all OECD member countries as of May 2021.

4. Data refer to the definition of extreme poverty as specified by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC, 2021_[1]), Social Panorama of Latin America 2020. www.cepal.org/sites/default/files/publication/files/46688/S2100149_en.pdf. Data for 2020 refer to an estimate based on 2019 data, as specified in Annex I.A2 of (ECLAC, 2021). Projections are based on 2017 data for Chile, 2014 for Guatemala and 2018 for Mexico. Applying the same criteria as in previous LEO editions, data selection prioritizes comparability across LAC countries and shows the latest comparable data available at the report’s publication date.

5. Data refer to the definition of poverty as specified by (ECLAC, 2021_[1]), Social Panorama of Latin America 2020, www.cepal.org/sites/default/files/publication/files/46688/S2100149_en.pdf. Data for 2020 refer to an estimate based on 2019 data, as specified in Annex I.A2 of ECLAC (2021). Projections are based on 2017 data for Chile, 2014 for Guatemala and 2018 for Mexico. Applying the same criteria as in previous LEO editions, data selection prioritizes comparability across LAC countries and shows the latest comparable data available at the report’s publication date.

6. Data for LAC from ECLAC, CEPALSTAT | Databases and Statistical Publications, https://cepalstat-prod.cepal.org/cepalstat/tabulador/ConsultaIntegrada.asp?idIndicador=3289&idioma=i. Data for Chile refer to 2017, instead of 2019, data for Guatemala refers to 2014.

7. Data for the OECD from OECD Income Distribution Database, www.oecd.org/social/income-distribution-database.htm.

8. Indicator provides the distribution of the total population living in informal households by quintile. An informal household has all of its workers in informal work. Quintiles are based on monthly total household consumption or income. The source of this indicator is the OECD Key Indicators of Informality based on Individuals and their Households database, https://stats.oecd.org/Index.aspx?DataSetCode=KIIBIH_B5.

9. Health expenditures as % of gross domestic product (GDP). Data from OECD (2020), Health at a Glance: Latin America and the Caribbean. Share of current expenditure on health. Data are from OECD (2020), Health at a Glance: Latin America and the Caribbean.

10. Data from UNESCO, https://en.unesco.org/covid19/educationresponse#schoolclosures.

11. Data from OECD et al. (2020), Latin American Economic Outlook 2020, www.oecd.org/publications/latin-american-economic-outlook-20725140.htm.

12. Data from International Telecommunication Union (2020), www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx.

13. Data from OECD et al. (2020), Latin American Economic Outlook 2020, www.oecd.org/publications/latin-american-economic-outlook-20725140.htm.

14. µg/m³. Data refer to population exposure to more than 10 micrograms/m³ and are expressed as annual averages. Data from OECD, https://data.oecd.org/air/air-pollution-exposure.htm.

15. Data from OECD, https://stats.oecd.org/Index.aspx?DataSetCode=INTACT_FOREST_LANDSCAPES.

16. Output per employed person as % of United States 2019 output per person employed. Data from the Conference Board, https://conference-board.org/data/economydatabase/total-economy-database-productivity

17. High-technology exports as % of manufactured exports. Data from The World Bank, https://data.worldbank.org/indicator/TX.VAL.TECH.MF.ZS.

18. Research and development expenditure as % of GDP. Data from The World Bank, https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS.

19. IP5 Patent families. Data from OECD, https://stats.oecd.org/Index.aspx?DataSetCode=PATS_IPC.

20. Percentage of people who think that the government is corrupt. “Is corruption widespread throughout the government in (this country), or not?” Data from Gallup 2021.

21. Percentage of people who think that the country is governed in the interests of few. “En términos generales ¿diría usted que (país) está gobernado por unos cuantos grupos poderosos en su propio beneficio, o que está gobernado para el bien de todo el pueblo?” Data from Latinobarómetro, 2020.

22. Percentage of people who think that the health care is of good quality. “In your city of area where you live, are you satisfied or dissatisfied with the availability of quality health care?” Data from Gallup 2021.

23. Percentage of people who think that the water is of good quality. “In your city or area where you live, are you satisfied or dissatisfied with the quality of water?” Data from Gallup 2021.

24. Percentage of people who are victim of criminality, “have you been a victim of any type of crime in the past 12 months?” Data from Latin American Public Opinion Project, www.vanderbilt.edu/lapop/data-access.php.

25. Data from RFS, Reporters without Borders, https://rsf.org/en/ranking_table.

26. Percentage of people who declare being left or right on a 1-10 scale (1=left, 10 = right). “In politics, it is normal to refer to left and right. On a scale where 0 is the left and 10 is the right, where would you place yourself?” Data from Latinobarómetro, 2020.

27. Data from OECD, www.genderindex.org/ranking/.

28. Revenues as % of GDP. Data from OECD et al. (2021), Revenue Statistics in Latin America and the Caribbean (2021).

29. Value added taxes as % of total revenues. Data from OECD et al. (2021), Revenue Statistics in Latin America and the Caribbean (2021).

30. Social protection expenditures as % of GDP. Data from OECD and ECLAC.

References

Conference Board (2015), The Conference Board’s Alternative China GDP, http://www.conference-board.org//retrievefile.cfm?filename=FAQ-for-China-GDP_9nov1511.pdf&type=subsite.

ECLAC (2020), Social Panorama of Latin America, United Nations Publication, http://www.cepal.org/sites/default/files/publication/files/46688/S2100149_en.pdf.

Eurosocial (2021), The roadmap for EU Cooperation on social cohesion, https://eurosocial.eu/en/.

Gallup (2021), Gallup World Poll (database), www.gallup.com/analytics/232838/world-poll.aspx.

ITU (2020), World Telecommunication/ICT Indicators Database 2020, https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx.

Latinobarómetro (2020), Vanderbilt (database), Latin American Public Opinion Project, http://www.vanderbilt.edu/lapop/data-access.php.

OECD (2021), OECD.Stat (database), Social and Economical Indicators, https://stats.oecd.org/Index.aspx.

OECD et al. (2020), Latin American Economic Outlook 2020: Digital Transformation for Building Back Better, OECD Publishing, https://doi.org/10.1787/e6e864fb-en.

OECD/The World Bank (2020), Health at a Glance: Latin America and the Caribbean 2020, OECD Publishing, https://doi.org/10.1787/6089164f-en.

Reporters without Borders (2021), World Press Freedom Index (database), https://rsf.org/en/ranking_table.

SIGI (2019), OECD.Stat (database), Social Institutions & Gender Index (SIGI), http://www.genderindex.org/ranking/.

UNESCO (2020), COVID-19 impact on education school closure, https://en.unesco.org/covid19/educationresponse#schoolclosures.

World Bank (2020), “Research and development expenditure (% of GDP)”, https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS.

World Bank (2019), “High-technology exports”, https://data.worldbank.org/indicator/TX.VAL.TECH.MF.ZS.