Country risk

Country risk in Mexico is low to moderate. The OECD country risk rating is 3 which indicates a relatively low to moderate likelihood that Mexico will be unable and/or unwilling to meet its external debt obligations, although private and sub-sovereign debtors can and do default. Mexico’s economic performance will continue to be heavily influenced by external developments, including in the US. The government is continuing efforts to strengthen the rule of law, stamp out corruption and reduce crime. But governance issues, uneven reform implementation, illicit drug trade and high levels of violence remain long-standing constraints on the operating environment for business.

Mexico is ranked 60th out of a possible 190 economies on the World Bank’s ease of doing business scorecard, well above the Latin America and Caribbean average of 116. Mexico outperforms Latin America and the Caribbean in almost all categories. That said, getting electricity is slightly harder in Mexico given the complex nature of the process and economic and geographical factors.

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 mentioned during election cycles across Latin America. The current government favours control of the nation’s oil and energy production.

Political risk in Mexico is low. But Mexico’s governance indicators relative to the rest of Latin America and the Caribbean are mixed. Regulatory quality and government effectiveness are the only two categories where Mexico ranks above the regional average. Despite authorities’ ongoing efforts to tackle corruption and reduce crime, measures of political stability/absence of violence and control of corruption are notably below the Latin American and Caribbean average.