In the 2025 ranking, Mexico occupied the place 39 between 67 in economic performance. He maintained an outstanding position in employment, as well as a lower dynamism in business efficiency (54), but his institutional performance is what keeps him in the background: he fell to site 62 in government efficiency. The same goes for infrastructure (61). “It is a partial advance. There are macroeconomic improvements, but they do not translate into a transformation of the state apparatus or a more predictable environment to invest,” says Caballero.
In Latin America, only Chile presents an acceptable level in government efficiency, with a classification in the 30th place. The rest of the Latin American economies are concentrated at the bottom of the table: Colombia (65), Brazil (68), Argentina (67), Peru (59) and Venezuela (69). Mexico is just above them.
The entire region lives a period marked by political polarization. According to the IMD survey to more than a thousand Latin American entrepreneurs, 81% considered that social divisions in their countries have a political root. The global average was 57.6%. “In Latin America, polarization no longer responds to clear ideological lines. The left and right are diluted. Political parties lose identity. That generates uncertainty,” says Caballero.
Mexico reflects this fracture. Recent reforms, such as the popular election of judges, have aroused more doubts than certainties. “It is not clear if this strengthens or weakens the Judiciary,” says Caballero.
Polarization not only damages internal trust, it also impacts the international image of the country. The IMD ranking includes a metric about the perception of risk for business relocation.
In 2024, Mexico took fourth place as a more attractive country to install operations. This year, it fell to the place 51. “Such a drastic fall reflects the weight of tariffs, political uncertainty and tensions with the United States,” explains Caballero. “Executives who respond to our survey also make real decisions. If they perceive that Mexico is no longer reliable to invest, something moves in that direction.”
Despite its challenges, Mexico stands out as the most productive economy in Latin America within the IMD ranking. However, this strength fails to compensate for the institutional ballast. Slow reforms, volatile policies and external uncertainty draw a complex scenario for the coming years.
Geography, considered for years as a strategic blessing, becomes a double -edged sword weapon. Mexico benefits when the United States lives stability. But when Washington is in the uncertainty phase, as now with commercial policy, that link becomes vulnerability, says Caballero.
