2019 Index of Economic Freedom

Mexico

overall score64.7
world rank66
Rule of Law

Property Rights59.1

Government Integrity26.3

Judicial Effectiveness34.9

Government Size

Government Spending78.2

Tax Burden75.8

Fiscal Health83.2

Regulatory Efficiency

Business Freedom67.8

Labor Freedom58.6

Monetary Freedom75.9

Open Markets

Trade Freedom81.4

Investment Freedom75.0

Financial Freedom60.0

Create a Comparison Chart

See how Mexico compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 123.5 million
  • GDP (PPP):
    • $2.5 trillion
    • 2.0% growth
    • 2.5% 5-year compound annual growth
    • $19,903 per capita
  • Unemployment:
    • 3.4%
  • Inflation (CPI):
    • 6.0%
  • FDI Inflow:
    • $29.7 billion

Mexico’s economic freedom score is 64.7, making its economy the 66th freest in the 2019 Index. Its overall score has decreased by 0.1 point, with declines in judicial effectiveness, trade freedom, monetary freedom, and labor freedom overwhelming a significantly higher score for fiscal health. Mexico is ranked 12th among 32 countries in the Americas region, and its overall score is above the regional and world averages.

Mexico’s $2 trillion GDP reflects the benefits of regional trade, so the U.S.–Mexico–Canada Agreement signed in 2018 is vital. The new government is likely to continue reforms in the energy, financial, fiscal, and telecommunications sectors with the long-term aim of improving competitiveness and economic growth across the economy. Growth in 2019 should be aided by higher oil prices, but the economy is still constrained by low productivity, a still-large informal sector that employs over half of the workforce, weak rule of law, and corruption.

Close

Background

The Institutional Revolutionary Party (PRI) ruled Mexico for 70 years until its defeat by the center-right National Action Party in 2000. Although the PRI regained the presidency in 2012 under former President Enrique Peña Nieto, it was greatly weakened in the July 2018 landslide victory of populist Andrés Manuel López Obrador, whose MORENA party also won a substantial majority in Congress. López Obrador has promised to fight corruption. His post-election support of a renewed North American Free Trade Agreement signaled a more pragmatic approach to governance and a welcoming attitude toward badly needed foreign investment, but López Obrador must prevail over Mexico’s powerful drug cartels to reverse surging homicide rates.

Rule of LawView Methodology

Property Rights 59.1 Create a Graph using this measurement

Government Integrity 26.3 Create a Graph using this measurement

Judicial Effectiveness 34.9 Create a Graph using this measurement

Property rights are protected, but the government has made the property registration process more expensive. The judicial system is weak. Frequent solicitation of bribes by bureaucrats and officials, widespread impunity, and the high incidence of criminal extortion undermine the rule of law. Corruption is pervasive and fed by billions of narco-dollars. More than 100 politicians were murdered in 2018.

Government SizeView Methodology

The top individual income tax rate is 35 percent, and the corporate tax rate is 30 percent. Other taxes include a value-added tax. The overall tax burden equals 17.2 percent of total domestic income. Over the past three years, government spending has amounted to 26.9 percent of the country’s output (GDP), and budget deficits have averaged 2.6 percent of GDP. Public debt is equivalent to 54.2 percent of GDP.

Regulatory EfficiencyView Methodology

There is no minimum capital requirement for launching a business, but completing necessary licensing requirements remains costly. Rigid labor laws that make the hiring and dismissing of employees costly provide an incentive for small companies to operate outside of the formal sector. The government began the liberalization of its energy market by deregulating gasoline prices in 2017.

Open MarketsView Methodology

The combined value of exports and imports is equal to 77.6 percent of GDP. The average applied tariff rate is 4.3 percent. As of June 30, 2018, according to the WTO, Mexico had 236 nontariff measures in force. The banking system remains relatively well capitalized, and foreign participation has grown. About 38 percent of adult Mexicans have access to an account with a formal banking institution.

Country's Score Over Time

View Chart of Scores over Time

Regional Ranking

rank country overall change
1Canada77.70.0
2United States76.81.1
3Chile75.40.2
4Saint Lucia68.71.1
5Jamaica 68.6-0.5
6Uruguay 68.6-0.6
7Peru67.8-0.9
8Colombia67.3-1.6
9Panama 67.20.2
10Saint Vincent and the Grenadines65.8-1.9
11Costa Rica 65.3-0.3
12Mexico64.7-0.1
13Barbados64.77.7
14Dominica63.6-0.9
15The Bahamas62.9-0.4
16Guatemala 62.6-0.8
17El Salvador 61.8-1.4
18Paraguay 61.8-0.3
19Dominican Republic61-0.6
20Honduras 60.2-0.4
21Nicaragua 57.7-1.2
22Trinidad and Tobago57-0.7
23Guyana56.8-1.9
24Belize55.4-1.7
25Haiti52.7-3.1
26Argentina52.2-0.1
27Brazil51.90.5
28Suriname48.10.0
29Ecuador46.9-1.6
30Bolivia42.3-1.8
31Cuba27.8-4.1
32Venezuela 25.90.7
See Entire Region List ›

View all countries ›

Back to Top