Mexico | Regional Sectorial Outlook. First Half 2024

By the end of 2023, the Mexican economy grew at an annual rate of 3.2%, with an extraordinary growth of 15.6% in construction and differentiated effects at the regional level. The dynamism of services underpins growth in 2023; Wholesale and Retail grew 3.9% and 4.1%, respectively.

Key points

• Key points:
• Manufacturing grew by only 0.9% in 2023, with two-thirds of sub sectors shrinking. However, the Transportation Equipment GDP increased by 8.6%, supported by the external sector.
• The recovery of GDP at the state level was slower than expected. We estimate that in 2023, all entities will grow driven by infrastructure spending, and during 2024, Coahuila will be the entity with the highest GDP growth, 4.2%.
• The total debt balance at the state level equals 3.9% of National GDP in 2023. The three entities with the highest debt as a proportion of their GDPE are Chihuahua at 8.1%, Quintana Roo at 7.8%, and Chiapas at 7.8%.
• FDI in Electricity plummeted from 2019 to 2023, being 50.1% lower than in the period from 2013 to 2017. We identified that the increase in manufacturing activity (particularly those with an export profile) drives FDI in Electricity with a two-year lag.
• During the period associated with nearshoring (2018 to 2023), Mexico has successfully diversified its range of exported products by 5.4%. However, it's important to note that the concentration of the destination of these sales has increased by 6.3%, primarily towards the USA. (Individual Article Available for download)

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