Mexico meets all the criteria for an emerging market economy. The country’s per capita gross domestic product (GDP) beats most of its peers in the developing world, but falls short of the threshold required to be classified as a developed country. The story with its Human Development Index (HDI) is similar: on the verge of being developed but still insufficient.
Compared to developed countries, such as the United States, Canada, and Australia, Mexico contains much larger swathes of abject poverty and regions where the common luxuries that the developed world takes for granted, such as the running water and access to quality medical care are scarce. . Despite this, the country is making commendable progress in improving the quality of life in its most neglected regions.
Key points to remember
- Mexico is a major trading partner of the United States, but the country is closer to a developing or emerging economy than to a developed economy.
- The country has experienced difficult gross domestic product (GDP) growth in recent years, and its GDP per capita remains well below the $ 12,000 per year (in US dollars) required by developed countries.
- The country also remains just below the threshold for developed economies based on the Human Development Index (HDI).
Mexico’s high economic growth rate is perhaps the most characteristic of an emerging market economy. Although the increase in its GDP year-over-year declined during the global recession and its slow recovery, Mexico’s growth was strong until 2014, but declined in the years that followed, with a GDP of $ 1.3 trillion in 2019 in US dollars.
Emerging market economies vs developed economies
Typically, developed economies meet several criteria. The gross national income (GNI) per capita of a developed country is at least $ 12,535 in US dollars. The world’s major economies have a much higher GNI per capita: $ 30,000 and more in US dollars. For developed countries, the HDI, an index based on measures of a country’s health, education and quality of life, should be 0.8 or higher.
In addition to the above quantitative criteria, several qualitative factors define developed countries. Access to drinking water, healthy food and medical care must be generalized. Every country, even the most developed, has poor and unhealthy people. What they do not present, however, are vast areas of abject poverty and deplorable living conditions.
Mexico as an emerging market economy
Mexico’s per capita GDP is below the US $ 12,000 required to be considered a developed country, but not by much. GDP per capita was recorded at $ 9,946 in US dollars in 2019.
The country’s most recent HDI calculation, for 2019, is 0.779. That’s just below the 0.80 mark required of developed countries – and Mexico ranks 74th out of 189 countries and far exceeds the developing country average.
The strongest feature of Mexico’s emerging market economy is not the current state but the pace of its development. Yes, the country still suffers from significant poverty, but it has declined rather than increased steadily. This trend has reversed over the past year with the global impact of the COVID-19 pandemic.
The bottom line
The Mexican economy may not be fully developed from 2021, but with new trade deals with the United States and Canada, it could still get there. As a result, the country remains a good example of an emerging market economy. As Mexico has grown into a strong manufacturing economy, with many US companies integrating operations across the border, hurdles remain. Among other things, the international drug trade continues to be a major contributor to violence and corruption across the country.