Economic Analysis


Population 129.0 million
GDP per capita 10,062 US$
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  2020 2021 2022 (e) 2023 (p)
GDP growth (%) -8.1 4.8 2.6 1.0
Inflation (yearly average, %) 3.4 5.7 8.4 6.7
Budget balance (% GDP) -2.9 -2.9 -3.0 -3.6
Current account balance (% GDP) 2.5 -0.4 -1.2 -1.5
Public debt (% GDP) 60.1 57.6 56.8 58.7

(e): Estimate (f): Forecast


  • Geographic proximity to the U.S. economy
  • Membership of USMCA and many other agreements
  • Substantial industrial base
  • Prudent fiscal and monetary policies
  • Free-floating exchange rate
  • Adequate foreign exchange reserves
  • Large population and relatively low labour cost


  • High dependence on the US economy
  • Rising criminality linked to drug cartels and trafficking, high corruption level surfing on poverty and inequality
  • Weaknesses in transport, health and education
  • High informality in the economy (55%) and the job market
  • Narrow tax base, with tax revenues representing 13% of GDP, depleted sovereign funds
  • Oil sector and PEMEX undermined by years of underinvestment


Activity set to decelerate in 2023

Growth momentum is expected to further lose steam in 2023. Activity will be dented by the weaker US economy, which is expected to affect Mexico´s manufacturing sector, tourism (7% of GDP in 2021) and remittances from expatriates (4% of GDP). In fact, the latter, in addition to durably high average inflation and tighter credit conditions, will contribute to the slowdown of household consumption (65% of GDP). Moreover, export (39% of GDP) growth will also cool, reflecting weaker economic momentum in the US (destination of 78% of exports). Conversely, public expenditure is likely to accelerate somewhat, with higher social expenses and resources for president Obrador´s key infrastructure projects (including the Mayan Train and the Dos Bocas refinery). Regarding private investment, while manufacturing will remain a key destination of foreign investments – Mexico has huge potential to benefit from the nearshoring narrative – the index is expected to underperform this year amid tightened global financing conditions and due to policy uncertainty. The latter includes the 2021 law strengthening the role of state-owned power utility company CFE at the expense of private firms. Indeed, in July 2022, the US and Canada separately requested consultations with Mexico under their USMCA trade deal over the latter’s energy policy. If an agreement is not reached, the US and Canada could request a resolution panel, which could prompt retaliatory tariffs.


Twin deficits (external and fiscal) will rise marginally

The current account deficit should widen slightly in 2023. The trade deficit (0.8% of GDP in 2021) is expected to marginally increase, since import growth will outpace the rise in exports on the back of decelerating global demand (affecting exports) and a durably high energy trade deficit (1.9% of GDP). More specifically, Mexico is a net oil importer, with fuel imports outweighing crude oil exports. In addition, the secondary income surplus will also decline, underpinned by weaker remittances amid a deterioration in the US job market. Meanwhile, the services account deficit (0.9% of GDP in 2021) should remain broadly stable. While freight costs should moderate from a high comparison base, the travel surplus is likely to curb amid fewer US visitors. Conversely, the primary income deficit is set to narrow (2.6% of GDP), notably due to lower profit and dividend repatriations by foreign firms. On the financing side, net foreign direct investment (2.5% of GDP) will continue to comfortably cover the external account shortfall. In addition, external debt (excluding FDI-related debt) stood at 38.7% of GDP in June 2022 (26% of GDP for the public-sector portion). Overall, Mexico should keep its solid external position supported by foreign currency reserves of USD 199 billion (covering roughly 4 months of imports) and a preventive USD 50 billion Flexible Credit Line with the IMF (renewed for two years in November 2021).
Concerning the fiscal accounts, the government is expected to maintain a prudent fiscal policy despite a mild increase in the nominal deficit. The 2023 budget suggests that public expenditure will exceed revenues. The former can be explained by higher interest payment, an increase in allocation for priority programmes and a capitalisation of state-owned oil company PEMEX, which aims to improve its refining capacity. Importantly, the 2023 budget also departs from an optimistic 3% GDP growth forecast for the year, representing a downside for the budget balance. Last, stabilisation funds are still largely depleted.


Lack of legislative consensus hinders constitutional amendments

The leftist President Andrés Manuel López Obrador, who took office in December 2018, has maintained his large popularity (approval rating stood at 65% in November 2022). This is despite the challenging landscape that includes the COVID-19 pandemic, the more recent sharp pick-up in inflation, and recurring drug cartel-related violence. Moreover, his Morena party won four out of the six state governments contested in June 2022, bringing the total number of Morena governments to 19 out of 31. The latter also is an indication of the party’s possible strength for the 2024 general election (Mexico’s presidency is limited to a single six-year term). Still, the ruling government coalition has the strongest representation in Congress, holding 277 (out 500) seats in the Lower House and 72 (out of 128) in the Senate. Nonetheless, despite these absolute majorities, the approval of Obrador's key reforms, such as the nationalisation of the energy sector and electoral reform, are hindered by the fact that relevant constitutional changes require a two-thirds majority. Regarding the former matter, in April 2022, Congress voted down a major electricity reform, which would have tightened state control over the power market. Nevertheless, in the same month, the Supreme Court upheld a law passed by lawmakers in 2021 that changed electricity dispatch rules to favour CFE, the state-owned electric utility, over private producers. In addition, the electoral reform bill aiming to convert the National Electoral Institute (INE) into a smaller and more powerful body of elected officials (among other changes), was rejected by the Lower House in December 2022 amid criticisms that the move could undermine the country's electoral independence. However, a few days later, Obrador was able to obtain Congress approval for an alternative, less sweeping overhaul of the electoral law, which will shrink INE’s budget and water down its faculties. The amendment this time would require only an absolute majority.


Last updated: February 2023


Debts are commonly paid in Mexico by cheques, wire transfers and – in some special cases – credit cards. Corporate payment processes are governed by companies’ internal policies. Most companies request supporting documentation from the other party before proceeding with a transaction (e.g. the company’s articles of incorporation, or its tax identification, known as the Registro Federal de Contribuyentes). The documents most frequently related to commercial transaction are invoices, promissory notes, and cheques. Promissory notes are unconditional promises, in writing, to pay a person a sum of money. In Mexico, this document is normally used as a guarantee of payment from the buyer. It is signed by the legal representative of the buyer – and hence, the debtor – for an amount which is superior to the total amount of the debt. Promissory notes and cheques also serve as certificates of indebtedness. Once buyers possess the relevant information, they can proceed to make payments by wire transfer or cheque, with both methods taking approximately ten to fifteen working days. Wire transfers are more common, as cheques can be post-dated, thus presenting the risk that buyers will issue cheques that they cannot finance.


Debt collection


In terms of debt collection, original invoices act as proof of the acceptance of the debt and the establishment of a commercial relationship between the parties. According to commercial and civil laws, the commercial agreement is sealed by two elements: an object (in this case the product or the service), and the price of the object as agreed by the parties. Even in the absence of a written agreement, an invoice provides both of these elements. Invoices are therefore the most effective form of proof in a lawsuit situation, as they show that the parties made a sale agreement and have a reciprocal obligation to pay the price agreed and to deliver the goods or provide the service.

In 2014, the Mexican Tax Authorities (Servicio de Administraci Servicio de Administración Tributaria) ruled that all invoices must be electronic, with an XML file. They must also be verified by the tax authority system in order to be validated. The tax authority also requests electronic confirmation when the creditor receives payment, along with a receipt in an XML file as legal confirmation. These new requirements entered into force in December 2017. The goal of these changes is to limit the amount of fraud cases and ghost companies, both of which are prevalent in Mexico.


Amicable phase

Before entering into legal proceedings in Mexico, creditors normally attempt to contact their debtors via telephone. A written letter is sent to the debtor, in which the debtor is notified of the amount of the debt and the creditor’s intentions to negotiate payment terms, other steps include a visit to the debtor by a collection specialist. During this visit, the collection specialist will attempt to develop a more detailed perspective on the debtor’s situation. The specialist will endeavour to ascertain if the company is still in business and if it has assets (such as real estate, merchandise or other rights) that could be seized in the event of a legal process.

When creditors initiate collection actions with an amicable phase, it is common for debtor companies to disappear altogether. This means the discontinuation of commercial activities that could potentially enable the payment of sums due.

When entering into commercial export relationships, companies are advised to ensure that all documentation conforms to Mexican law. A lack of correct information and documentation opens exporters up to the possibility of fraud committed by Mexican companies and reduces the likelihood of successful debt recovery during the amicable phase.


Legal proceedings

The Medios Preparatorios a Juicio Ejecutivo Mercantil is a pre-legal process takes place when there is an invoice as a proof of the pending payment and of the commercial relationship. Creditors request that the judge obtains a citation from the debtor or its legal representative. He then obtains the confession and acceptance of debt from the debtor, as well as the pending payment. As the confession before the judge is an executive document, the creditor is then able to initiate the Summary Business Proceeding legal process. This pre-legal process takes approximately two or three months. There are subsequently three types of proceedings that can be initiated against debtors:


Summary Business Proceeding

This legal process takes place when there is a Certificate of Indebtedness (promissory notes, cheques or legal confessions before the judge by the debtor or its legal representative). The process begins with the phase of citation, when the creditor initiates the lawsuit by requesting that the debtor pays the total amount of the debt due. If the debtor does not have sufficient funds, the creditor can request that some of its assets be seized. These assets can include real estate, merchandise, bank accounts, industrial property rights and trademarks, to be used as a guarantee against the total amount of the debt. Once the assets are seized as a guarantee of the debt, the legal process continues until the judge renders his final resolution. Then, if there is no negotiation or payment, the creditor can initiate the auction of assets to recover the debt. This legal process takes approximately six to eighteen months, although this can vary from case to case.


Ordinary Business Proceeding

Ordinary Business Proceedings are the most time consuming procedure in Mexican commercial law. They can take place in the absence of a Certificate of Indebtedness, which means that the only proof of a commercial sale between the parties is the commercial agreement with invoices. In this type of process, assets can only be seized as a guarantee of the total amount of the debt when the judge has rendered his final sentence condemning the debtor to make payment. This legal process takes approximately one to two years.


Oral Proceedings

Oral proceedings take place when the total amount of the debt does not exceed EUR 31,856.68. As with Ordinary Business Proceedings, assets can only be seized as a guarantee of the total amount of the debt when the judge has rendered his final judgment condemning the debtor to pay the amount due. This process takes approximately four to six months. On May 2, 2017, Mexican congress made a modification which ruled that all commercial disputes be processed through Oral Proceedings, with no limitations on amounts, with effect from January 25, 2018.


Enforcement of a legal decision

A judgment is enforceable as soon as it becomes final. If the debtor does not comply with the judgment, the creditor can request a mandatory enforcement order from the court, in the form of an attachment order, sale of specific assets, or liquidation of the company. This takes between six months to two years.

Foreign judgments can be enforced through exequatur proceedings. The court will verify that certain requirements are fulfilled, prior to recognising the foreign decision. The court establishes whether the foreign court had jurisdiction to decide on the issue and whether enforcing the decision will not conflict with Mexican law or public policy.

Insolvency proceedings

Out of court proceedings

With the approval of creditors holding 40% of the debt, debtors can constitute a “pre-packaged” reorganisation agreement. This enables the court to issue an insolvency declaration and declare the company in concurso mercantile.



Liquidation can only be requested by the debtor itself, but the debtor can be placed into liquidation as a result of its failure to submit an acceptable debt restructuration proposal to its creditors through the concurso mercantile proceedings. A liquidator is appointed and given the responsibility for managing the company, selling its assets and distributing the proceeds to the creditors according to their rank.

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