New growing economy in Mexico gives the green light to international investment and settlement. With solid macroeconomic institutions, Mexico is the second-largest economy in LATAM and among the 15 biggest economies in the world. After rising by 5.9% in 2021, the Mexicos’ GDP will increase by 3.3% in 2022 and 2.5% in 2023. The progressive improvement in the labor market and the growing percentage of the population that is vaccinated and immunized will promote consumption. In addition, infrastructure initiatives will boost investment, and inflation will gradually decrease after a significant increase in 2021.
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Employment
In terms of formal employment, the number of workers connected with the Mexican Social Security Institute (IMSS) increased by 846 thousand in 2021, the highest number of positions created since 1998, according to this study. This is primarily due to the economic recovery, which allowed people to return to work after the closure and lost almost 1.1 million employees.
Service sector
The service sector in Mexico’s economy is very robust. This sector accounted for 64.07% of GDP and 61.07% of the labor force in the second quarter of 2021, while the industrial sector accounted for 28.33% of GDP and 25.12% of the workforce. Moreover, technological development plays a vital part in the service sector as Mexico currently boasts the world’s largest fin-tech industry. The number of digital startups quadrupled since 2010, and government and venture capital investment in the startup ecosystem is rising.
Inflation
Inflation is expected to drop, with the headline rate lowering faster and more pronounced than the core rate. The prediction is that headline inflation will climb slower each quarter, reaching 4.1 percent by the end of 2022. Meanwhile, we estimate core inflation to rise in the first quarter of this year before gradually falling over the next three months, completing the year at 4.5 percent. Inflation is expected to return to more low levels in 2023, closing at 3.5 percent.
So why settle your business in Mexico?
As a nearshoring opportunity, Mexico has the potential to become a natural bridge between the Atlantic and the Asia-Pacific regions. The continuous expansion of the Mexican economy will be enabled by the Mexican government’s economic development strategy, which includes a consolidation of domestic consumption as a result of the implementation of social programs and financial inclusion, an increase in private investment in infrastructure and strategic sectors, a higher level of public investment, and an increase in exports as a result of global value chain reconfiguration.
Technological development is around the corner when talking about Mexico’s vast talent pool. Mexico’s workforce boasts superior English and Spanish language skills, closeness to the United States and Canada, handy time zones, and collaborative culture, thanks to higher education, a growing middle class, and women’s economic engagement. As a result, Mexico is well-positioned to assist international technology growth, with over 650,000 working technology experts and a technology workforce growing three times faster than the world average.
Mexico aspires now to build its economy via appropriate economic, technological, financial, and commercial policies, despite the conditions that have hindered growth in recent years.
About ITJ
ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico. For more information, visit www.itj.com.
