Macroeconomic environment and market size are Mexico’s main strengths for competitiveness

Mexico lost 6 positions on the Global Competitiveness Report, moving down from place 60 to 66 (out of 139 countries evaluated). This result was produced by a fall on the ranking on 10 of the 12 areas evaluated by the World Economic Forum for this report.

Although the general results have a negative trend, there are two areas where Mexico remains on good positions:
• “Market size”, which considers domestic and exports markets. The rationale for the evaluation of this area according to the Report is that “…the size of the market affects productivity since large markets allow firms to exploit economies of scale…”. Mexico is on number 12 according to the size of its domestic market since Mexico is the 11th most populated country within the 139 evaluated, and is the number 15 based on the value of exports of goods and services (supported mainly by the volume of exports to USA).

• "Macroeconomic environment”, Mexico has had an improvement of 21 places on the last 2 years, mainly driven by positive results on the government budget balance, although it had a setback on inflation. Mexico ranks now on number 27.

The first area is attractive in terms of the potential business volume in the region, since Mexico is the 2nd biggest market in Latin America, and USA’s 2nd commercial partner.

The second area is particularly attractive considering all the recent economic turmoil, especially the one related to public debt, where Portugal, Ireland, Greece and Spain have been creating unsettlement for the last four months. Mexico has the 2nd best macroeconomic environment in Latin America.

On a next article, I will talk about the weak areas to have a balanced picture of structural conditions for productivity in Mexico.