Growth disparities across Mexican states are increasing

Total factor productivity is recovering

Income inequality is high and female labour force participation is lagging

Reforms are expected to yield large impacts

The economy is resilient

A recession is unlikely in the short term

Oil dependence in Mexico

Monetary policy has successfully anchored inflation expectations

The government expects to return to primary surplus and put the debt-to-GDP on a downward path

Some well-being indicators are low compared to OECD peers

With low social spending, poverty and income disparities remain high

Disparities across Mexico

Mexico's tax structure should be more diversified

Mexico's VAT, as a share of tax revenues, is in line with OECD but lags behind peer countries, 2014

Increase spending while ensuring fiscal sustainability

Education quality remains lacking in Mexico and regional differences persist

Lack of skills is a major constraint on firms' operations

Female labour force participation in Mexico has increased but leadership gaps remain

Gender gaps in financial inclusion are large

Multi-factor productivity diverges across sectors

Employment and productivity changes in the agriculture sector during catching-up episodes among selected OECD countries

Mexico's import content of exports (ICE) in selected manufacturing sectors has declined

Ample scope to reduce foreign investment and trade barriers

Mexico is the poorest performer for safety and corruption across OECD countries

Green growth indicators in Mexico

Financial inclusion is a key enabler of economic growth and poverty reduction

Financial inclusion in Mexico remains the lowest amongst OECD countries

Financial access points are still low in many municipalities

Use of financial services and access points has slightly improved

The use of formal credit is low

Women entrepreneurs' share in the informal sector is large while the share of women employers is significantly lower

Paid leave entitlements should be more gender equitable

ESG scores of Mexican firms are lower than other Latin American countries

Differences between sectors are large

Productivity is picking up in some parts of the economy

Mexico's backward and forward participation in GVCs, 2011

Backward GVC participation ratio: relative contribution of policy and non-policy factors

The impact on GVC integration of other policies

Mexico's participation in GVCs, share of intermediates in total trade of manufactured goods and export penetration into the US economy

Mexico's exports are evolving

Light vehicles production and installed capacity

Auto sector performance

Mexico's backward and forward participation to GVCs in selected sectors vs peer OECD countries (2011)

Projected 2014 backward GVC integration in manufacturing industries (ICE)

Sectorial complexity measures vs backward participation in GVCs (ICE)

Backward GVC participation and labour productivity vs revealed comparative advantage (RCA)

Mexico's Knowledge Economy Index (KEI) is the lowest among OECD countries

FDI flows and stocks

FDI, backward integration to GVCs and labour productivity

Research and development (R&D) expenditure

Sectors spending more in R&D are more integrated in GVCs and enjoy higher labour productivity

Intellectual property activity

ISO certified industries are more backward integrated in GVCs

Sectors with higher educated workers are more productive and more integrated in GVCs

Mexico's share of engineering graduates is high but lags behind in tertiary and vocational

High sectoral concentration is an issue in the south

Entry barriers vary widely across localities

Contribution of SMEs to GVCs in Mexico

Informality and productivity by firm size

Aggregate TFP growth and firm-level dispersion

Vulnerability to demand shocks in GVCs, by economy