Mexico’s new OECD survey returns to long-running debates, but with near-term pressure. It lands amid slowing growth and as the fiscal deficit is being brought down. The OECD’s message is that Mexico cannot rely on macro stability alone. It calls for stricter adherence to the rule of law, lower crime, and a wider tax base. It also links long-run competitiveness to education, digitalisation, and regulatory predictability. The open question is how quickly reforms can move from paper to implementation nationwide.
What the latest OECD survey highlights
The OECD released its latest economic survey on Feb. 26, 2026, and framed it as a choice about priorities. It expects GDP to grow 1.4% in 2026 and 1.7% in 2027, after 0.7% in 2025. Inflation is projected at 3.6% in 2026 and 3.2% in 2027, near the midpoint of the central bank’s target range. Mathias Cormann presented the report in Mexico City with Finance Minister Edgar Amador. The survey’s core message is that fiscal sustainability and productivity reforms must move together. It calls for steady fiscal consolidation and stresses more efficient spending to preserve room for education and digitalisation. It also highlights informality, noting that just over half of employment sits outside the formal sector. The OECD links lower informality to stronger skills and clearer pathways into formal jobs. One through line is the investment climate. The survey argues that a stable, predictable regulatory framework supports long-term decisions, especially under trade uncertainty. It presents this as a way to turn short-term resilience into durable growth.
Rule of law and crime as economic constraints
The OECD connects governance and security to growth. In a summary circulated in Mexico, the OECD says the country needs a stricter rule of law. It also calls for more effective courts and institutions that act independently in practice. The survey also points to the financial system and the risk posed by criminal networks. It argues that lower crime can support investment and improve well-being. The OECD’s own economic snapshot uses similar language. It calls crime a major concern for firms and citizens. It links stronger anti-crime efforts to investment and growth. The International Monetary Fund has echoed this logic. Its 2025 Article IV consultation links potential growth to closing infrastructure gaps. It also links it to strengthening the rule of law. The IMF highlights judicial independence and the need to tackle corruption and crime. It also calls for stronger supervision to combat financial crimes and money laundering. Taken together, the message is that courts and enforcement affect economic outcomes. It also signals that regulatory autonomy matters for investor confidence. This matters for contract enforcement and for day-to-day security risks.
Independent metrics show the scale of the governance gap that the OECD keeps flagging. The World Justice Project’s Rule of Law Index 2025 ranks Mexico 121st out of 143 countries. Overall, Mexico ranks 28th out of 32 in Latin America and the Caribbean. The World Justice Project also reports that Mexico’s overall rule-of-law score decreased in the 2025 index. In the same release, Mexico ranks 134th on absence of corruption. It ranks 132nd in order and security. It ranks 134th on civil justice and 135th on criminal justice. National crime statistics show why security stays central. INEGI recorded 33,241 homicides in 2024 on a preliminary basis. That equals 25.6 homicides per 100,000 people. In the same report, that rate is higher than the definitive 2023 rate of 24.9. The report lists firearms as the most common mechanism recorded on death certificates. These are registered-deaths data, not a classification under criminal law. These indicators cannot isolate cause and effect. They do, however, help explain why policy debates focus on enforcement capacity and court reliability. For residents and businesses, this affects dispute resolution, contract execution, and location risk. Foreign residents can be exposed through housing contracts, insurance claims, and everyday mobility.
Fiscal squeeze and the tax-to-GDP gap
Fiscal constraints are one reason the OECD links growth priorities to governance and taxation. The OECD has described Mexico’s 2024 public deficit as about 5% of GDP, the highest level in 35 years. In that assessment, the widening deficit reflected higher spending on infrastructure projects, universal non-contributory pensions, and added support for Petróleos Mexicanos. Mexican reporting on the survey similarly highlights interest costs, pensions, and Pemex support as pressures that limit fiscal space. The OECD argues that fiscal consolidation should continue, but it flags a trade-off: deficit reduction should not crowd out productivity-enhancing areas. It calls for better-targeted spending and greater spending efficiency so that the state can invest in education, digitalisation, the green transition, and security. It also points to a stronger medium-term fiscal framework, supported by spending reviews and cost-benefit analysis. This framing treats budget design as growth policy, not only debt management.
On the revenue side, the OECD argues there is headroom. Revenue Statistics data show Mexico’s tax-to-GDP ratio rose from 17.7% in 2023 to 18.3% in 2024. Mexico ranks last among the 38 OECD countries. It kept the 38th place in both 2023 and 2024. The OECD average was 34.1% in 2024. The OECD also notes that Mexico’s ratio rose from 10.9% in 2000 to 18.3% in 2024. The OECD’s economic snapshot links revenue to the growth agenda. It says credible deficit reduction needs spending and revenue measures. It also says extra tax revenue should fund productivity-enhancing investment. The IMF echoes parts of that approach. In its 2025 Article IV consultation, the IMF says consolidation should mobilise revenues. It points to stronger tax administration and tax policy changes. It also highlights Pemex’s finances and the need for a stronger medium-term fiscal framework. This emphasis places revenue policy inside debates about education, infrastructure, and security funding. The debate is therefore about expanding fiscal capacity without destabilising the macro framework.
Competitiveness priorities for the next cycle
Beyond fiscal and security issues, the OECD puts a large share of its reform agenda in competitiveness basics. It sees digitalisation as a way to lift investment and productivity, but it ties that to market structure and governance. The survey calls for stronger pro-competition rules in telecommunications and stresses guarantees of regulator independence. It also pushes for more advanced digital government to widen service access and improve delivery. Education is treated as the long-run counterpart to digital reforms. The OECD links high informality to low educational attainment and asks for more students to complete at least secondary school, along with better education quality. It also argues that expanding childcare and eldercare provision can raise women’s access to formal jobs. On climate and energy, it describes Mexico as highly vulnerable and calls for a national adaptation plan. It also calls for better information on water availability and for more investment that supports a target of 38.5% clean electricity by 2030, including grid upgrades.
Trade exposure heightens the cost of fragility in these areas. The United States remains Mexico’s dominant market, and data from the Office of the United States Trade Representative indicate that in 2024, over 80% of Mexican goods exports went there. In the OECD’s December 2025 outlook, most USMCA-compliant exports are assumed to face a 0% tariff. Non-compliant exports are assumed to face a 25% tariff through 2026–27. The OECD describes the agreement as a shield against trade restrictions. It also reports that the share of compliant exports rose from about 50% to near 80%. Autos, auto parts, and trucks are included in the OECD tariff assumptions. The OECD also expects exports to be dampened by higher tariffs and uncertainty. A review of the USMCA is underway, adding uncertainty for firms and investors. This is where the OECD’s emphasis on a stable, predictable regulatory framework intersects with its focus on the rule of law and anti-crime policy. For firms deciding where to place their supply chains, security, courts, and policy continuity go hand in hand.
With information from OECD press release, El Universal, IMF Country Report, INEGI Registered Deaths Statistics, World Justice Project
