Overview of Mexico’s Real GDP
The real GDP of Mexico increased by 5.7% from the previous year to $1.3 trillion in 2021. Between 2010 and 2021, Mexico's economy expanded by a CAGR of 1.7%. However, an increase in COVID-19 cases and rising oil prices amid conflict between Russia and Ukraine dimmed Mexico's growth outlook.
Outlook on Global Economy
Real GDP refers to base year prices, which include inflation. Changes in real GDP indicate the increase or decrease in the volume of economic activity and measure economic growth.
The US, China, Japan, Germany, and India are the leading economies around the world in terms of real GDP. The US real GDP topped with $18.6 trillion in 2021, followed by China with a value of $12.7 trillion. During the same period, Japan’s real GDP reached $6 trillion, ranked third in the world. The other two largest economies are Germany and India, with real GDPs of $3.8 trillion and $2.9 trillion, respectively.
Factors Affecting the Global Economy
A rise in COVID-19 cases:
More cases have been reported globally due to Omicron, a new COVID-19 variant, which has disrupted supply chain management. However, the worldwide vaccination campaign has decreased COVID-19 fatalities.
Russia-Ukraine war:
Global economic expansion will be hampered by a protracted conflict between Russia and Ukraine. Due to the war, trade and investment have suffered because Russia has been subjected to economic sanctions, and several significant corporations have ceased operations there.
Rising Inflation and Interest Rates:
The inflation rate in developing and advanced economies have been rising, causing central banks to tighten monetary policy and raise interest rates to control price rises. However, a sustained rise in interest rates could push some economies into financial distress.
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