The World Bank In Mexico

With a population of almost 130 million, a rich cultural history and diversity, and abundant natural resources, Mexico is among the 15 largest economies in the world and the second largest economy in Latin America. The country has strong macroeconomic institutions, and it is open to trade.   

Over the last three decades Mexico has underperformed in terms of growth, inclusion, and poverty reduction compared to similar countries. Its economic growth averaged just above 2 percent a year between 1980 and 2018, limiting progress in convergence relative to high income economies.

The economy grew 4.8 percent in 2021 after contracting by 8.2 percent in 2020. Supported by increased mobility and U.S. demand, the services and manufacturing sectors posted solid performances during the first half of 2021. However, the recovery lost momentum during the second half of 2021 because of supply chain shortages, a rise in COVID-19 cases, and depressed investment. To enable a better and sustained recovery over the medium term, the country will also need to deal with some of the most pressing pre-crisis challenges to growth and inclusion.

Last Updated: Apr 07, 2022

The Country Partnership Framework (CPF) for Mexico was discussed by the World Bank Group (WBG) Board of Executive Directors on February 27, 2020. The CPF covers a six-year period (2020-2025) and aligns the WBG’s engagement with the government’s National Development Plan. The objectives remain highly relevant in the present context, allowing flexible and strategic adjustments to respond to the current supply and demand shocks and to support a strong resilient economy. It builds on the analysis of the Systematic Country Diagnostic (SCD) and reflects the views and strategy of the authorities.

Last Updated: Apr 07, 2022

Expanding financial access for Mexico’s poor and support economic recovery. During the past five years, the World Bank has been supporting Mexico’s efforts to deepen financial inclusion and expand access to finance, which has been a critical bottleneck for growth and poverty reduction. The Bank has supported Mexico’s expansion of needed financial access to poor and rural populations, women, youth, and micro, small, and medium sized enterprises (MSMEs).

Through an established network of private financial intermediaries (PFIs), the Expanding Rural Finance Project increased the availability of finance to rural MSMEs in areas where commercial banks had not been able to reach local producers. This Project helped to establish and/or improve credit, risk, and management capacity of 255 small PFIs located in rural areas. Between 2016-2019, 173,981 credits for productive purposes were extended to 139,253 rural producers and MSMEs (average loan size of US$1,850), of which 76 percent live in rural areas in the poorer states of the South, 83 percent are women, and 22 percent live in communities classified as marginalized or highly marginalized by the National Council for Population.

Rural MSMEs benefited from improved access to finance and expanded economic activity, and the funding helped PFIs reach more clients and grow their activities in rural areas with low levels of non-performing loans. Lending through PFIs and thus leveraging their distribution networks helped not only increase the Rural Financial Development Agency’s (FND in Spanish) reach of a difficult segment of the market. It also served to promote inclusion, job creation, and support private sector supply of rural finance in Mexico’s poorest states while making them self-sustained over time. This experience can now be passed on to other countries in which rural finance is limited and/or proved difficult to expand. The program supported by the Bank has helped create a path towards an effective recovery as well as supporting a longer-term development agenda in the area of financial sector development.

Last Updated: Apr 07, 2022