Mexico

What does the map enable, and what does it threaten?

Mexico's map is its fortune and its burden. It is a large country of 133 million people¹ on two oceans, with a land border with the United States, the market that takes more than 80% of its exports¹¹. That position turned it into a manufacturing platform: exports hit a record US$664.84 billion in 2025¹¹. The same border carries the drug trade north, and the cartels that profit from it have fought the state since the military offensive began in December 2006²⁴. Oil made the state rich after it nationalised the industry in 1938²¹, but Pemex now drains the budget⁸. A superb location that imports its neighbour's problems along with its demand.

Is the population growing, skilled and staying?

Mexico has about 133 million people with a median age of 30^1,2, a large and still-young workforce. Open unemployment is low, 2.8% in September 2026⁵, but that hides the weakness: 54.3% of those in work are in the informal economy⁶, outside the tax net and with little training or protection. The factories that sent exports to a record in 2025¹¹ show what part of the workforce can do. Comparable data on school results and skills was not gathered for this assessment, hence low confidence. A big labour force, mostly in low-productivity informal work.

What habits does the society reward?

The habits behind clean, predictable government are weak. Mexico scored 27 on Transparency International's 2025 index, ranking 141st of 182 countries¹². More than half of working Mexicans, 54.3%, are in informal jobs⁶, a sign of low trust in and low compliance with the state. Even the state's own numbers are doubted: there are significant doubts over the accuracy of official homicide figures¹³. This score is about institutions and social habits, not about any group.

Who rules, how are they chosen, and are they competent?

Judged by deeds, President Claudia Sheinbaum, elected in June 2024 as Mexico's first woman president¹⁵, has a mixed record. On security she has acted: official figures show February 2026 averaging 48.8 murders a day, the least violent February in 11 years¹³, and forces killed the leader of the Jalisco New Generation Cartel with US intelligence support¹⁴. On the economy she has not: growth fell to 0.5% in 2025 and debt keeps rising³, and Moody's cited continued support for Pemex as limiting the government's ability to stabilise debt⁸. Her government also pressed through a judicial election that drew 12.6% to 13.3% turnout¹⁶.

Is there rule of law, low corruption and predictability?

Order is Mexico's central weakness. The government reports falling violence, with February 2026 averaging 48.8 murders a day, but there are significant doubts over the accuracy of those numbers¹³. The cartels' reach was plain when the armed forces killed the leader of the Jalisco New Generation Cartel on 22 February 2026: cartel members set up about 250 roadblocks nationwide, and at least 25 National Guard personnel were killed¹⁴. Corruption is deep, with a score of 27 and a rank of 141st of 182¹². The state is fighting harder; it has not yet won control.

Where are the fault lines, and how stable are they?

Mexico has a strong national identity and a government with a clear mandate: Sheinbaum won 61.18% of the vote in 2024, and her coalition took 73% of the seats in the Chamber of Deputies¹⁵. The divisions are about institutions rather than identity. The judicial election of June 2025 drew only 12.6% to 13.3% of voters, and critics and government read it in opposite ways¹⁶. Cartel violence splits regions from the centre¹⁴. Survey data on social trust was not gathered, hence low confidence. Strong mandate, shallow institutions.

Why does the world need this country?

Mexico matters. Its economy is about US$2.2 trillion³, and its exports reached a record US$664.84 billion in 2025, more than 80% of them to the United States¹¹. It is one of three members of the North American trade pact, which Washington declined to renew in July 2026, putting it under annual review⁹. It is also central to the United States' two domestic obsessions, drugs and migration, which gives it leverage and makes it a target. Its weight is regional and economic; it projects little power beyond North America.

What does it need, want and fear?

Need: open access to the US market, which takes more than 80% of its exports¹¹; a renewed North American trade pact, which it sought for a further 16 years and the US declined in July 2026⁹; and fiscal room, which support for Pemex is eating⁸. Want: to keep its investment-grade rating, now on negative outlook at S&P⁷; and to show Washington it can deal with the cartels itself^13,14. Fear: US tariffs, eased after the US Supreme Court ruled that emergency powers do not authorise them¹⁰, returning in another form; the pact lapsing; and a cartel backlash beyond the state's control¹⁴.

Who are its patrons, rivals and hedges?

Mexico has one overwhelming partner and few alternatives. More than 80% of its exports go to the United States¹¹, so its room to balance is small. When the trade pact came up for its first joint review on 1 July 2026, Mexico and Canada wanted a further 16-year term; the US declined, moved to annual reviews, and has preferred bilateral talks with each neighbour separately⁹. Cooperation on security is real: US intelligence supported the operation that killed the CJNG leader in February 2026¹⁴. Mexico manages its giant neighbour; it cannot balance against it.

Can it deter, or does it depend on others?

Mexico's armed forces are built for internal security, not for war. SIPRI puts its military spending at 0.74% of GDP in 2025⁴, low for a country of its size. The military has been at the centre of the fight against the cartels since December 2006, a conflict with an estimated 350,000 to 400,000 deaths from 2006 to 2021²⁴. It can strike cartel leaders, but the backlash after the February 2026 operation, with about 250 roadblocks and at least 25 National Guard personnel killed¹⁴, shows the limits. It faces no external military threat.

Rising, stagnant or declining, and how fast?

Judged by results, Mexico is drifting down. The IMF records growth of 3.1% in 2023, 1.5% in 2024 and 0.5% in 2025, and forecasts 1.5% for 2026³. Government debt is rising, from 52.7% of GDP in 2023 to a forecast 62.1% in 2026³. The rating agencies have noticed: Moody's cut Mexico to Baa3 in May 2026, and S&P moved its BBB rating to a negative outlook, citing very slow fiscal consolidation due to low growth^7,8. Exports at a record¹¹ show the manufacturing base is intact; the US decision to put the trade pact under annual review⁹ puts it at risk.