The Secret Economic Giant Nobody is Talking About (It’s Mexico)

For decades, the global economic narrative has been dominated by a select few powerhouses. The BRICS (Brazil, Russia, India, China, and South Africa) captured headlines as emerging economies with immense potential. More recently, the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) continued to wield significant influence. But a new contender is rising, and it’s poised to shake up the established order: Mexico.

A Rising Star: Mexico’s Economic Trajectory

In a 2005 report by Goldman Sachs titled “Global Economics Paper No: 134,” the concept of the N-11 (Next Eleven) emerged. This group of developing nations, including Mexico, was identified as having the potential to become major economic forces. The report highlighted Mexico’s favourable demographics, a young and growing population, and its scope to catch up with developed economies as key drivers of its future growth.

Goldman Sachs’ projections were bold. They predicted that by 2025, Mexico’s GDP (Gross Domestic Product) would propel it to become the world’s eleventh-largest economy, bigger than Brazil or Canada (but behind Italy or Korea). This dramatic rise wouldn’t be solely driven by population growth. The report emphasized Mexico’s potential for productivity convergence, meaning it could close the efficiency gap with developed economies like the United States.

Additionally, an appreciating Mexican currency would further bolster its economic strength. By 2050, they predicted Mexico’s GDP would skyrocket, propelling it to become the world’s sixth-largest economy, surpassing even Russia.

Goldman Sachs’ Evolving Projections: Mexico’s Persistence Pays Off

While the 2005 Goldman Sachs report ignited excitement over Mexico’s rapid ascent, their recent December 2022 report, “Global Economics Paper: The Path to 2075,” reveals a more measured, but equally promising, path for the nation.

Despite a general slowdown in global growth rates, Mexico demonstrates a resilience that sets it apart. Here’s what the latest analysis highlights:

• The Tortoise, Not the Hare: Global economic expansion might be cooling, but Mexico’s steady, persistent progress sets the stage for long-term success.
• The Power of Emerging Markets: Asia’s giants may lead the charge, but Mexico’s consistent growth reaffirms the strength of emerging economies worldwide.
• US Dominance Wanes: While the US has enjoyed a strong period, the projections point to its inevitable slowdown, opening opportunities for nations like Mexico to gain ground.
• Bridging the Gap…With Challenges: The world is becoming more economically equal on a global scale, yet internal inequalities within nations – including Mexico – demand attention.

Mexico’s Moment on the Horizon

Mexico’s journey might be less meteoric than initially predicted, yet its trajectory remains undeniably upward:

• 2022: A Solid Foothold: Mexico has cemented its position as the world’s 14th largest economy, surpassing Spain but still trailing behind Brazil, Korea, and Australia.
• 2050: Entering the Big Leagues: Projections indicate Mexico is set to become the 11th largest economy by 2050, narrowing the gap with France (9th) and Russia (10th).
• 2075: Staying Power: Mexico is poised to hold this 11th position, surpassing former powerhouses like Japan, Russia, and France.

Where Does Mexico Stand Today?

Goldman Sachs’ ambitious 2005 projections placed Mexico as the world’s 11th largest economy by 2025. Looking at 2023 data from the International Monetary Fund, we see Mexico has almost caught up to this prediction. Using both nominal GDP and GDP adjusted for purchasing power parity, Mexico currently holds the 12th spot. Considering we’re just two years away from the 2025 mark, Mexico seems incredibly well-positioned, potentially even exceeding those early projections.

The Path to 2050 and Beyond

While the pace of Mexico’s rise might be slightly slower than the initial forecasts, the trajectory remains undeniably positive. The nation’s persistence and resilience in the face of global economic shifts position it well for long-term success. If current trends continue, Mexico is well on its way to entering the top ten economies by 2050. Could it even surpass declining powers like Japan and France and break into the elite G7? It’s a distinct possibility.

More Than Just Numbers

Mexico’s aspirations transcend economic prowess. Under the leadership of President Andrés Manuel López Obrador (AMLO), the country is committed to the social welfare of its citizens. AMLO’s administration has been characterized by initiatives like “abrazos no balazos” (hugs not bullets), aiming to improve security through non-violent means. Although the effectiveness of these social policies has been debated, the intent reflects a dedication to social well-being.

As the 2024 elections approach, the MORENA party, with Claudia Sheinbaum as its frontrunner, leads the polls. Sheinbaum’s candidacy represents not only the potential for Mexico to elect its first female president but also a continuation of the pursuit of social welfare and prosperity. Her leadership could herald a new era of progress and cooperation, setting an example for other nations.

A Mexico that champions both economic growth and social justice is indeed a vision of triumph. The nation’s journey towards such an ideal is a testament to its people’s resolve to cultivate a society that values prosperity and fairness in equal measure.

Other Promising Forecasts

It’s important to note that other respected sources have also made compelling projections for Mexico’s economic ascendancy:

• Economist Intelligence Unit: In their “Long-term macroeconomic forecasts – Key trends to 2050” report, Mexico is predicted to become the world’s 8th largest economy by Nominal GDP by 2050.
• PWC: Their 2015 report, “The World in 2050: Will the shift in global economic power continue?”, forecasts Mexico as the 9th largest economy by 2030 and the 6th by 2050. Their 2017 report offers a similar projection, ranking Mexico 7th by 2050.

FAQ