Country risk in Mexico is low to moderate and has an OECD country risk rating of 3. This indicates a relatively low to moderate likelihood that Mexico will be unable and/or unwilling to meet its external debt obligations—though, needless to say, individual private and sub-sovereign debtors can and do default). Mexico has a large dependence on the US economy, and history suggests that economic struggles in the US get magnified in Mexico (2008 GFC). Mexico currently experiences frequent corruption, high illicit drug trade and high levels of violence.
Mexico is ranked 54 out of a possible 190 economies on the World Bank’s ease of doing business scorecard, and well above the Latin America and Caribbean average of 112. Mexico outperforms most of Latin America and the Caribbean in all categories though getting electricity is slightly harder in Mexico due to its electricity sector being largely under state-control.
The risk of expropriation in Mexico is low to moderate. Mexico has a history of natural resource expropriation over the last century, and it remains a popular policy, often mentioned during election cycles across Latin America. Indeed, incoming President López Obrador has touted the possibility of increasing government control of the nation’s oil and energy production.
Political risk in Mexico is low. But Mexico’s governance indicators relative to the regional average are mixed. Regulatory quality and government effectiveness are the only two categories where Mexico ranks above the regional average. Political stability/absence of violence and control of corruption are notably below the Latin American/Caribbean average.