The World Bank said in a report released on Wednesday that Mexico should implement a series of reforms to boost the country’s low productivity.
The need for change, it said, was “more important than ever” as the COVID-19 pandemic exacerbated long-standing structural challenges to productivity growth.
According to the financial institution, which works to combat poverty around the world, Mexico lacks the capital to propel economic growth.
Central bank member Jonathan Heath similarly said in February the country lacked a “growth engine” and the private investment needed to up the country’s gross domestic product (GDP).
The World Bank called for an end to market concentration in Mexico and said that while large firms control much of the country’s economic power, they do not grow quickly enough or create enough jobs.
If the Latin American nation had followed the United States’ recovery from the 2008 financial crisis, Mexico’s productivity would be 9% higher, the report said.
In an accompanying event in Mexico on Wednesday, the country’s Deputy Finance Minister Gabriel Yorio said that the hit to global value chains initially caused by the COVID-19 pandemic would likely be prolonged due to Russia’s recent invasion of Ukraine.