The IMCO places Mexico in the top 10 of the least competitive countries in its ranking of 43 nations. The most important setbacks were observed in the areas of economics and law.
For the second consecutive year, Mexico occupied the 37th position out of 43 countries in the International Competitiveness Index (ICI) 2022 carried out by the Mexican Institute for Competitiveness ( IMCO ), which means that the country is among the 10 least competitive countries in the world. report.
The best position for the country, in terms of competitiveness, was recorded between 2005 and 2009, when Mexico ranked 30th.
Subsequently, between 2010 and 2019, Mexico’s position oscillated between places 31 and 33; However, as of 2019, the country began to trace a downward trend, so the 2021 and 2022 reports (which place Mexico in 37th place) are the worst positions for Mexican competitiveness since they exist.
In the 2022 report, the country improved in five of the 10 sub-indices and maintained the same level in three of them, however, it registered significant setbacks in two very relevant sub-indices: economics and law.
Mexico, failed in competitiveness indices in economics and law
The most important setbacks for competitiveness in Mexico were observed in the areas of economics and law.
In a disaggregated manner, Mexico ranked 34th in the economy category, the result of a drop of seven positions as a result of the increase in inflation and the loss of economic freedom.
Ivania Mazari, coordinator of evaluation and analysis of the IMCO, pointed out in an interview that this fall was due to the fact that while in other countries of the world they have already managed to recover from the economic blow caused by the pandemic, in Mexico they have not yet managed to do so.
“In 2020 our economy fell around 8 percent and in 2021 the recovery was only 4.8 percent, for this reason, other countries are ahead of us,” he said.
In addition to the Gross Domestic Product (GDP), inflation also played against competitiveness, since, although the price increase in some key products such as energy products was kept under control, other items, such as food, reduced the power purchasing power of people, added the specialist.
Javier Galán Figueroa, coordinator of the specialty of monetary and financial economics at UNAM, pointed out that inflation affects the country’s competitiveness because it increases the operating costs of companies.
“We know that the Bank of Mexico has tried to stabilize prices by increasing the interest rate, but we are still seeing an inflation not seen in the last 20 years, which generates uncertainty and cost overruns in the business that imports supplies,” he said. .
Regarding the category of law, Mexico went from 39th to 41st place, due to less independence of the judiciary and deterioration of both the Rule of Law and the Global Peace Index.
Regarding this indicator, the IMCO specialist explained that, although the country usually does well in compliance with contracts, what most affects this item are human rights violations.
“Mexico is the second country with the highest homicide rate of the countries evaluated, it is only below South Africa,” said the IMCO.
Despite the fact that Mexico managed to advance positions in the sub-indices of society, governments, factor markets, international relations and innovation, Mazari indicated that these were insufficient advances to compensate for the sharp falls observed in economics and law, which caused it to stagnate.
“This reflects the country’s persistent inability to build the foundations that would allow it to be more competitive globally,” he said.
Meanwhile, in the environment, political system and precursors sub-indices, Mexico remained unchanged, as it has managed to improve in various areas, such as less loss of forest area and use of pesticides, gender equity and better coverage of Internet users, to mention a few achievements.
“Mexico needs to create conditions to achieve greater productivity and generate well-being for its inhabitants,” the report reads.
The other countries that accompany Mexico in the list of the 10 least competitive countries are:
· South Africa.
· Guatemala and.
In contrast, the country that registered the highest competitiveness in the ranking was Denmark , followed by:
· South Korea.
· Finland and.
AMLO had a meeting with Victoria Rodríguez from Banxico: Mexico’s economy ‘is fine and good’ This after Banxico released a second cut to the growth forecast for the economy in 2022 in its quarterly inflation report.
The sectors with the greatest and least progress in competitiveness in Mexico are:
At the global level, the greatest advances observed during the last year were registered in four areas. In the first place, the growth of the GDP since the average annual rate of the countries included in the ICI went from -4.6 percent in 2020 to 6.3 percent in 2021.
Advances were also observed in the unemployment rate, since the proportion of the Economically Active Population (PEA) that does not work decreased from an average of 7.9 to 7.7 percent.
The other two advances were observed in a greater commercial opening and in the increase of protected natural areas.
In contrast, the greatest setbacks occurred in the area of inflation, in less paid women, greater perception of corruption, worse evaluation in finances, and growth in external debt.