Mexico 2017 OECD Economic Survey reforms are paying off

1. OECD ECONOMIC SURVEY
OF MEXICO 2017
www.oecd.org/eco/surveys/economic-survey-mexico.htm
Reforms are paying off
10 January 2017, Ciudad Mexico

2. Productivity growth is picking up
Note: Shaded areas show projections for 2016 and 2017.
Source: OECD Economic Outlook 100 database. 2

3. Reforms affected many states and
sectors but others lag behind
Examples of frontier sectors are auto,
telecommunications, quarrying, warehousing services.
Fastest-growing states are Zacatecas, Querétaro,
Aguascalientes, Guanajuato.
Source: OECD calculations using data from INEGI.
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4. Mexico is a top reformer
Note: Emerging OECD countries include Chile, Estonia, Hungary, Mexico, Poland and Turkey. Southern Europe
countries are Greece, Italy, Portugal and Spain.
Source: OECD, Going for Growth 2015.
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5. Reforms led to a decline in telecom and
electricity prices
Note: Peer OECD countries include Estonia, Hungary, Poland, Portugal, Slovak Republic, Slovenia, and Turkey.
Source: OECD Calculations – data from International Energy Agency and OECD System of National Accounts. 5

6. Oil and gas prices have risen recently
Source: OECD Calculations using Bloomberg and Servicio Geológico Mexicano (SINEM).. 6

7. The energy reform attracts
foreign investment
(USD billions)
1st
auction
2nd
auction
3rd
auction
4th
auction
Overall investment committed 2.70 3.10 1.10 34.4
Investment in the short-term 0.15 0.60 0.62 0.34
Auctions (round 1) outcomes for exploration and extraction of
hydrocarbons
Source: Secretario de Energía (SENER). 7

8. More infrastructures are needed
Source: OECD calculations with national agencies. 8

9. Revenues rose sharply after the fiscal reforms
Note: IEPS represents the special tax on products and services.
Source: Ministry of Finance (SCHP) 9

10. The oil dependence has declined
Source: OECD calculations using data from the Ministry of Finance (SHCP) 10

11. Credit increased after the financial reform
Source: Banco de México.
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12. The economy is more resilient
Note: Shading shows projections.
Source: OECD Economic Outlook 100.
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13. Reforms will boost growth
Source: OECD Economic Survey of Mexico 2015. 13

14. WHAT IS LEFT TO DO
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15. Implementation remains key
(*non-Pacto reforms)
Reforms with
implementation well
advanced
Reforms with gaps in
implementation
Reforms that have not
advanced enough
Tax policy
Financial sector
liberalisation
Telecom deregulation
Election system
Competition policy
and regulatory
Energy market
openness
Labour market and
tackling informality
Education quality
Anti-corruption and
transparency
Judicial process
reform
Innovation system*
Fiscal federalism*
Agricultural
transformation*
Unemployment
insurance,
pensions
and social benefits
Health system
reform*
Urban planning*
Source: OECD Compilation.
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16. Additional reforms will further boost growth
Source: OECD Economic Survey of Mexico 2015. 16

17. Informality did not decrease by much
Note: Rates are calculated against the total employed population including agriculture.
Source: INEGI, Encuesta Nacional de Ocupación y Empleo (ENOE). 17

18. Agricultural transformation has not yet
happened
Note: Countries presented are OECD peer countries. Catching-up periods have been identified as period of sharp decrease in the GDP per
capita gap with the highest tier of OECD members. The selected countries/periods are as follows: CHL (2007-13), GRC (2001-09), HUN (2000-
06), KOR (2007-15), POL (2006-12), SVK (2000-08), SVN (2000-08), and TUR (2001-11). Productivity is defined as the average value added per
employee within the agricultural sector, in USD PPP 2011.
Source: OECD calculations using data from the Economic Outlook 100 and the World Bank.
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19. Female labour participation is rising,
but the gender gap remains large
Source: OECD Calculations using data from INEGI.
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20. Paid leave entitlements are low and
not gender equitable
Source: OECD Family database. 20

21. Gender gaps in financial inclusion are large
Source: Encuesta Nacional de Inclusión Financiera (ENIF) 2015, (CNBV, 2015). 21

22. Poverty is stagnant but social
conditions are improving
Note: Panel A: Food poverty: insufficient income to purchase the basic food basket. Patrimony poverty: insufficient disposable income to acquire the
food basket and make the necessary expenditures on health, education, clothing, housing and transportation. Population with income below the
minimum welfare line: people who cannot acquire the value of the food basket with their current income. Population with income below the well-
being line: people who cannot acquire the value of the sum of a food basket plus a basket of goods and services with their current income.
Source: OECD Income Distribution Database, CONEVAL, INEGI.
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23. Taxes and transfers have a low impact
Note: Data from the latest available year. Source: OECD Income Distribution database.
23

24. High perceived corruption
hampers growth
Source: Transparency International (2015). 24

25. Mexican firms are less socially responsible
than other North and South American firms
Note: Average environmental (E), social (S) and governance (G) score.
Source: ASSET4 Thomson Reuters data.
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26. Recommendations to transform
agriculture and reduce informality
• Strengthen awareness of in-work subsidies for formal
workers.
• Focus enforcement on large formal firms employing informal
workers.
• Reform the legal framework of eijidos and tierras
communales (areas of communal lands used for agriculture).
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27. Recommendations to improve
female participation
• Expand public early childcare and pre-school coverage.
• Extend the length of paternity and maternity leaves.
• Better enforce the constitutional provision on gender
discrimination, particularly in the workplace, boardrooms and
credit markets.
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28. Recommendations to tackle poverty
• Simplify the administrative procedures for accessing cash
transfers.
• Increase the role of social workers in reaching out to
marginalised families.
• Strengthen social expenditure on programmes to eradicate
extreme poverty, such as Prospera.
• Raise and broaden the minimum pension to expand the old-
age safety net.
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29. Recommendations to fight
corruption and crime
• Build capacity of the sub-national level entities involved in the
new anti-corruption system.
• Encourage more states to establish integrated state-wide
police forces.
• Extend oral trials to all civil and commercial cases.
• Boost training, resources and technology for the judiciary.
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30. Compare your country data visualization tool
OECD Economic Surveys: Mexico 2017
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