Country Office Contacts
MEXICO +5255 5480-4200 (Visits by appointment)

Insurgentes Sur No. 1605, Piso 24 Col. San José Insurgentes, México 03900, D. F.
cmolinahernandez@worldbank.org

USA +1 202 473-1000

1818 H Street NW, Washington, DC 20433
cmolinahernandez@worldbank.org

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Mexico Overview

President Enrique Peña Nieto took office in December 2012 for a six-year term. During his first year in office and with the majority of votes in Congress, he has acted swiftly to pursue overdue structural reforms, in the areas of labor market regulation, education, telecommunication and competition policy, financial sector regulation, energy, and fiscal policy. The administration will now focus on secondary legislation and in demonstrating implementation progress before the mid-term congressional elections in July 2015.

Economic growth in 2013 fell to 1.1 percent, compared to the strong recovery experienced between 2010 and 2012 (annual average growth of 4.3 percent). Deceleration in economic activity was driven by weaker export demand and a contraction in domestic investment, largely in construction. A gradual recovery of economic activity with more dynamic exports as the U.S. economy gains steam and normalization of public expenditures should bring economic growth back to a range of 3 to 4 percent over the next few years.

 Growth performance is also attributed to stagnant total factor productivity due to low competition, poor contract enforcement and burdensome regulation resulting in widespread informality.  Liberalization of the energy sector is expected to boost Mexico’s economic growth performance, and has created enthusiasm in the investor community, as reflected by the recent credit rating upgrade to A3 by Moody’s.

Mexico’s strong fundamentals, sound policy framework and skillful macroeconomic management have allowed the country to deal with financial volatility and heightened risk aversion related to the exit from unprecedented monetary policies in major advanced economies. Mexican financial asset prices have been less affected compared to other emerging markets and financial markets have been able to cope without mayor liquidity pressures or the need for public intervention. The authorities remain committed to let the exchange and interest rates respond to market forces, a commitment that is credibly backed by a reasonable level of international reserves (US$ 177 billion) and a Flexible Credit Line arrangement with the International Monetary Fund (US$ 73 billion).

Private investment, particularly in the energy sector, may enhance economic growth in the not-too-distant future, though productivity effects will likely become evident only over the course of several years.

The current administration is striving to contain a spiral of drug violence. The leaders of the vigilante “self-defense” groups of Michoacan state signed an agreement with the Mexican government that transforms them into an officially sanctioned security force. The self-defense groups sprang up last year to confront the Knights Templar drug cartel and moved aggressively this month into territory where the cartel held sway. Also, on February 23, 2014 Mexico arrested Joaquin “El Chapo” Guzman, considered the world's most powerful drug kingpin. 

The Mexico Country Partnership Strategy for FY14-19, discussed by the Board in December 2013, is one of the first CPSs to be fully aligned with the WBG twin goals of ending extreme poverty and promoting shared prosperity. It demonstrates a systematic effort at selecting World Bank Group activities with the highest impact, taking into account WBG comparative advantage and client demand. It offers integrated WBG packages of financial, knowledge, and convening services in four strategic themes:

  • unleashing productivity;
  • increasing social prosperity;
  • strengthening public finances and government efficiency;
  • promoting green and inclusive growth.

Mexico is currently The Bank’s largest borrower in terms of exposure with US$15.1 billion in outstanding debt as of end January 2014. The active portfolio is composed of 18 projects, including 6 standalone Global Environment Facility (GEF) projects, totaling US$2.1 billion in net commitments. A US$300 million Development Policy Loan in the education sector was approved on December 2013.

The Bank’s financial engagement (loans, GEF, Clean Technology Fund) focuses on supporting an inclusive, efficient, and integrated social protection system and on the green and inclusive growth agenda. It supports Mexico through a wide grant portfolio of approximately $456.3 million (including GEF), comprising 42 active grants mainly focusing on environmental and energy issues. 

A few examples of the work of the World Bank in Mexico:

Disaster risk management. The Bank has been engaged with the Government of Mexico for several years in this area, and is supporting Mexico’s move towards a comprehensive strategy of preventing and managing disasters.

This strategy focuses on:

  • Risk identification,
  • Risk prevention and management,
  • Risk financing, and
  • Post-disaster reconstruction.

Climate Change. For more than a decade, Mexico, with World Bank support, has worked to develop ambitious policies to mitigate and adapt to climate change. The financial, knowledge, and coordination services facilitated by the Bank have contributed to increasing the areas under environmental management by 20 percent, to improving air quality in Mexico City, and to increasing water availability.

Subnational development. The World Bank is also working closely with the Government of Oaxaca, one of the poorest States in Mexico, through a Memorandum of Understanding that includes financial, knowledge and coordination services in multiple sectors, tailored to the specific needs of Oaxaca.

Education. The World Bank has a broad engagement with Mexico on education and labor market issues, one example being the support of an early education program in rural areas, implemented by the National Council for the Promotion of Education, CONAFE.

LENDING

Mexico: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

Around The Bank Group

Find out what the Bank Group's branches are doing in Mexico.