A Hypothetical Path of Recovery and Sustained Growth for the Mexican Economy from 1990 to 2020

Abstract

The Mexican economy deviated from its growth path in 1982, as a result of a balance of payments crisis and the subsequent recommendations of international financial institutions to overcome it. Since then, the country has experienced slow growth and instability, with economic policy between then and 2025 focused primarily on
controlling inflation. In contrast, this paper presents a possible hypothetical trajectory, assuming that the economy had regained its capacity to grow in 1991. It posits that achieving such a pace of expansion would have been feasible, based on an analysis of the growth previously observed within the same economic system. The paper does not address what would have been required to achieve that outcome. In 2024, there are countries that are on the path to development and are growing rapidly, especially in Asia, such as South Korea, which also experienced a balance of payments crisis around the same time. There are no clear reasons why Mexico could
not have pursued a similar course.This simulation is based on the premise that growth is driven by the expansion of the manufacturing sector and its productivity. It applies the average annual growth rates by manufacturing branch observed between 1961 and 1970 to the value added in 1990, and projects this year by year until 2022. The rest of the sectors remain unchanged. The results assume the necessary resources were available and depict a prosperous, predominantly industrial economy.