Mexico enters the 2026–2036 decade at a critical economic inflection point. Despite macroeconomic stability, trade openness, and deep integration into global value chains, long-term growth has remained moderate and volatile. More importantly, it has failed to generate sustained gains in productivity, real wages, or economic complexity.
This paper examines the structural mechanics underlying Mexico’s growth performance over the past three decades and assesses the conditions required to shift toward a more productive and sustainable growth path over the next ten years.
Core insights
- Between 1991 and 2024, Mexico’s economy grew at an average annual rate of 2.29 percent, driven primarily by factor accumulation rather than efficiency gains.
- Total Factor Productivity made a persistently negative contribution to growth, constraining real wages, fiscal space, and long-term convergence.
- Economic growth has been concentrated in a limited set of sectors—primarily services—with weak productivity performance and limited spillovers.
- High import elasticity and modest productive investment have weakened the domestic growth multiplier, limiting the transmission of demand into domestic value creation.
- External opportunities, particularly nearshoring and North American reindustrialization, will not translate into sustained growth without a structural shift toward productivity.
Scope of analysis
The analysis focuses on long-term structural dynamics rather than short-term cycles. Specifically, the paper examines:
- The sources of economic growth using the KLEMS growth accounting framework
- The evolution and macroeconomic implications of Total Factor Productivity
- Sectoral growth patterns, productive heterogeneity, and their impact on wages and investment
- The interaction between aggregate demand, imports, and domestic supply capacity
- The implications of geoeconomic fragmentation, nearshoring, and trade reconfiguration
- Structural constraints related to informality, innovation, energy, security, and institutions
Productivity as a binding constraint
The evidence presented in this paper indicates that Mexico’s growth challenge is fundamentally structural. Expansion based on factor accumulation faces diminishing returns and rising vulnerability to external shocks. Without sustained productivity gains, growth cannot be scaled, diversified, or translated into durable improvements in income and well-being.
In this context, productivity is not a residual outcome; it is the central condition for sustainable growth, investment viability, and fiscal sustainability.
Strategic framework for the 2026–2036 horizon
Beyond diagnosis, the paper outlines a sequenced growth and productive transformation framework for the 2026–2036 period. The proposed approach emphasizes:
- Productivity as an explicit policy objective
- Economic complexity and related diversification
- Innovation and technological diffusion as core growth levers
- Territorial development hubs as platforms for productive learning
- Energy availability, economic security, and institutional certainty as enabling conditions
Scenario analysis suggests that consistent implementation could raise potential growth toward 3.5–4.0 percent per year, while failure to address binding constraints risks prolonged stagnation.
Intended audience
This report is designed for decision-makers and institutions engaged in medium- and long-term economic strategy, including:
- Policymakers and senior public-sector officials
- Financial institutions and development banks
- Corporate leaders and investors assessing Mexico’s growth outlook
- Economists, analysts, and strategy teams focused on productivity and structural reform
Intended use
The paper is intended to support strategic decision-making by:
- Providing a structural diagnosis of Mexico’s growth constraints
- Clarifying the trade-offs associated with alternative growth paths
- Informing investment, policy design, and institutional priorities
- Framing nearshoring within a realistic productivity and capability-building context
Access the full report
English:
Mexico 2026–2036: Productivity, Productive Structure, and Sustainable Economic Growth
Spanish:
México 2026–2036: Productividad, Estructura Productiva y Crecimiento Económico Sostenible
