Mexican Economy Drops Two Slots in IMF Global Ranking
By THE PULSE NEWS MEXICO STAFF
Since the global covid-19 pandemic first erupted in March of 2020, Mexico’s economy has dropped two spots, from 15th to 17th place. according to the International Monetary Fund (IMF).
That is the worst position it has held since 1988, when it occupied the same place in a list of 190 nations.
The Mexican economy is expected to be worth $1.38 trillion next year, according to IMF estimates of the Gross Domestic Product (GDP) presented last week.
Meanwhile, the economy of Iran will have a value of $1.783 trillion and that of Indonesia, $1.411 trillion. The first nation surpassed Mexico in 2021 and the second will do so as of 2023.
At the turn of the century, the country boasted an economy twice the size of Iran, at $757 billion to $331 billion, and four times the size of Indonesia, worth $175 billion.
However, since then, Mexico’s GDP has expanded on average only 1.6 percent each year. In contrast, Iran has grown at average rates of almost double, 2.9 percent, and Indonesia at triple that rate, 4.9 percent.
Each country reports GDP in its own currency, so to compare them, the IMF converts the sums to a common currency, which in this case is the U.S. dollar, explained the IMF Director Kristalina Georgieva.
Mexico ranked among the top 10 largest economies between 1999 and 2003, even reaching eighth place in the first two years of the administration of former President Vicente Fox.
However, Mexico was also in 17th place during 1988, when it was preparing to emerge from its foreign debt crisis, At that time, it had a galloping inflation of 51.7 percent and the peso devalued 14 percent against the dollar.
“Total gross fixed investment stood at 18.5 percent of GDP in 2021, its second-lowest level since 1995. The outlook for investment in 2022 is dim in light of the uncertainties associated with the pandemic and various government policies,” said Citibank in an financial analysis report released earlier this month..
As of 2013, the national economy is expanding at a slower rate than global wealth, but the gap has widened with the pandemic.
After sinking 8.2 percent in 2020, the Mexican GDP grew 4.8 percent in 2021 and is expected to advance 2 percent in 2022, making it one of the few global economies that will not be able to recover this year the level it had in 2019, before the health crisis.
According to the IMF, Mexico’s economy will expand 2.5 percent in 2023, 1.8 percent in 2024 and then return to annual rates of 2 percent between 2025 and 2027, as during the three previous six-year terms.
The United States has led the global ranking since last century and will remain at the top until at least 2027, the IMF said.
China’s GDP has remained in second place since 2010, after occupying sixth place at the beginning of this century.