The Mexican economy faces growth without improvements in efficiency, driven solely by resource accumulation. Between 1991 and 2024, Total Factor Productivity registered an average negative contribution of 0.51% annually, according to calculations by Gerardo Leyva, former director of the Research Area at INEGI. In 2024, this indicator fell 0.35%, and between 2018 and 2024 its average contribution was practically nil.
The phenomenon reflects growth by "brute force", based on more workers, capital and inputs, but without advances in how these productive resources are combined. Economists warn that low productivity is one of Mexico's main problems, especially without sustained public and private investment. Economists have warned of the risk that the country could enter a cycle of low investment, low productivity and reduced expansion capacity.
Experts from Banco Base described the environment as a "stagnation trap", characterised by lower investment, falling productivity, greater informality and institutional weakening. The bank points out that Mexico's potential growth has been reduced to around 1.4%, which limits expansion capacity without generating more inflation. Shortfalls in energy and logistics infrastructure also constrain industrial production and trade.
Public investment does not offset private sector weakness. Public spending on physical investment collapsed 44.9% in the first two months of 2026, according to INEGI, while fiscal consolidation reduces the government's room to drive infrastructure. Private investment, for its part, awaits clearer signals about the commercial and institutional environment.
Sluggish economic activity is affecting tax collection. In the first quarter of 2026, marked by contraction, tax revenues fell 0.6% on an annual basis and were 1.6% below projections. According to the Finance Ministry, an additional percentage point of growth in 2027 would raise tax collection by 65,700 million pesos, but the effect also works in the opposite direction if the economy grows less than expected.