Mexico

With a population of nearly 130 million people, a rich cultural history, great diversity, and a favorable geography with abundant natural resources, Mexico ranks among the fifteen largest economies in the world and is the second largest in Latin America. The country has strong macroeconomic institutions, an open trade policy, and a diversified manufacturing base integrated into global value chains.

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Over the past three decades, Mexico has recorded average growth of close to 2% per year, insufficient to sustainably close the income gap with the world's advanced economies. Despite its integration into North American value chains and a large domestic market, productivity and investment growth has been weak. Significant regional disparities also persist, with more productive areas better integrated into formal economic activity, while others remain left behind.

At the same time, Mexico has made important progress in poverty reduction. The official multidimensional poverty rate — which combines income with six dimensions of social deprivation — fell from 43.2% in 2016 to 29.6% in 2024, supported by minimum wage increases, transfers, and non-contributory pensions. However, territorial gaps remain wide and informality continues to account for more than 50% of employment, while differences in access to public services, particularly health care, constrain inclusion.

The Mexican economy is projected to grow 1.4% in 2026, 1.8% in 2027, and 2.2% in 2028. The recovery would be supported by lower inflation and lower interest rates, which would boost domestic demand, alongside continued export growth. Nevertheless, the uncertainty associated with the USMCA review continues to weigh on investment and is expected to dissipate only gradually. Poverty, measured at the US$8.30 per day line in 2021 purchasing power parity, is projected at 20.0% in 2026 and 18.7% in 2028.

To sustainably raise growth and accelerate convergence, Mexico will need to strengthen productivity and formal job creation. This will require mobilizing greater private investment in infrastructure and energy, improving the business environment and regulatory certainty, expanding access to financing for small and medium-sized enterprises, promoting competition, strengthening institutional capacity and security, and making better use of value chain integration.

Fiscal space has narrowed due to growing pressures from pensions, interest payments, and support to PEMEX. The fiscal deficit is projected at 4.2% of Gross Domestic Product (GDP) in 2026 and would gradually decline to 3.7% in 2028, primarily through expenditure restraint and lower interest costs. Preserving debt sustainability while protecting social spending and growth-enhancing investment will remain a central challenge.

The World Bank is supporting the improvement of Cameroon’s competitiveness in energy, transport, and telecommunications. Furthermore, it is seeking to support service delivery for human development through a social safety net system and local development, with a focus on providing greater access to basic public services through infrastructure upgrades and capacity building in Cameroon’s most disadvantaged regions.

On climate change, Cameroon has committed through its Nationally Determined Contributions (NDC, 2021) to reduce its greenhouse gas (GHG) emissions by 35% (up from 32% as presented in 2015 at COP 21). Since COP21 in 2016, the WBG has integrated actions aimed at net reduction of GHG emissions and adaptation in its operations. The portfolio includes projects with climate co-benefits (CCB) of 47%. The latest Country Climate and Development Report (CCDR) for Cameroon launched in November 2022, highlights the challenges of climate change facing Cameroon’s development and outlines development priorities.

Last Updated: Mar 26, 2025

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RESULTS

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 World 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), for example, 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 $1,850), of which 76% live in rural areas in the poorer states of the South, 83% are women, and 22% live in communities classified as marginalized or highly marginalized by the National Council for Population.

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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. The CPF builds on the analysis of the Systematic Country Diagnostic (SCD) and reflects the views and strategy of the authorities.

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