Oaxaca ‘s economic activity showed a decrease of 2.7% during the second quarter of 2025 compared to the same period of the previous year, according to the Quarterly Indicator of State Economic Activity (ITAEE) , published by the National Institute of Statistics and Geography (Inegi) .

In this sense, the contraction is mainly explained by the decline in secondary and tertiary activities , while the primary sector managed to remain in positive territory

The most favorable performance was observed in primary activities —agriculture, livestock, fishing, and forestry—which grew 4.5% annually and placed the state 16th nationally.

In contrast, secondary activities, which include mining, manufacturing, construction, and electricity, declined 5.1% , placing Oaxaca 25th in the country. Tertiary activities, linked to services, commerce, and transportation, showed a decrease of 1.7%, placing the state last nationally within this group.

In the cumulative period from January to June 2025, the Oaxacan economy still shows slight growth of 1.2%, driven by the dynamism of the primary and secondary sectors , which grew 6.5% and 4.2%, respectively, while tertiary activities decreased by 1.1%.

However, in the national comparison, Oaxaca contributed -0.05 percentage points to the total variation of the ITAEE, placing it 27th out of the 32 states.

Excluding oil and gas mining, the country’s economic performance registered an annual variation of 0.3%. In this context, Oaxaca remained with a decrease of 2.7%, showing that the adjustment in the non-oil industry and services continues to limit its expansion

Oaxaca remains a key hub within the south-southeast, a region that together contributes 20.03% of the national GDP. Its performance in 2023, with 7.5% growth, and the attraction of foreign direct investment projects in renewable energy and the Interoceanic Corridor of the Isthmus of Tehuantepec, reinforce its strategic role in the country’s economic transformation.

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The Mexican Institute for Competitiveness (IMCO) published the 2024 State Competitiveness Index (ICE), a detailed analysis that measures the strengths and weaknesses of Mexico’s 32 states.

Four years after the pandemic, the 32 states show improvements in economic and infrastructure indicators. GDP per capita and GDP growth have registered significant increases; however, in other areas, there have been declines, especially in health, with an increase in morbidity from respiratory diseases and infant mortality across the country.

This report reveals that Mexico City has been crowned the most competitive state, thanks to its outstanding infrastructure and high level of education. Baja California Sur and Coahuila also stand out, showing strong performance in various economic and social indicators.

At the other end, Oaxaca is positioned as the least competitive state, as it faces serious challenges, especially in terms of foreign investment and economic complexity.

The ICE 2024 uses 50 indicators grouped into six sub-indices to evaluate the competitiveness of each state. Thus, we have:

Innovation and Economy: Chihuahua stands out for its high proportion of exports and economic complexity, while Oaxaca ranks last.

Infrastructure: Mexico City is the best connected, with an outstanding rate of point-of-sale terminals and mobile banking usage. Chiapas, on the other hand, shows poor results in access to mobile telephony and internet.

Labor Market: Mexico City has one of the highest average incomes for full-time workers and the highest level of education. Chiapas ranks last in average income and female labor participation.

Society and Environment: Mexico City leads in life expectancy and availability of hospital beds, while Hidalgo ranks last in access to health services.

Law: Coahuila stands out for its low crime rates and high perception of security, unlike Zacatecas, which has the lowest results in these aspects.

Political System and Governments: Yucatán is distinguished by its regulatory improvement and low perception of corruption, while Baja California has the lowest results in citizen participation and financial transparency.

Regarding the states preparing for elections, such as Mexico City, Chiapas, Guanajuato, Jalisco, Morelos, Puebla, Tabasco, Veracruz, and Yucatán, the report highlights that they face specific challenges in security, the labor market, and other areas.

As a result, the IMCO proposes a series of strategies to boost competitiveness at the state level, including the creation of state agencies to promote nearshoring. The development of strategies to improve access to telecommunication and internet services, the fostering of relationships between industries and educational institutions, the promotion of digital means for complaints and judicial processes, improving access to health services, and focusing public debt on local productive projects.

The IMCO 2024 State Competitiveness Index offers a detailed view of the strengths and weaknesses of Mexico’s states. As the country recovers from the pandemic, the report highlights the need for local public policies that address the specific challenges of each region, promoting equitable and sustainable growth throughout the country.

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The Mexican Institute for Competitiveness (IMCO) published the State Competitiveness Index (ICE) 2024, a detailed analysis that measures the strengths and weaknesses of Mexico’s 32 federal entities.

Four years into the pandemic, the 32 entities show improvements in economic and infrastructure indicators. GDP per capita and GDP growth have seen significant increases, however, in other aspects, there are deteriorations, especially in health, with an increase in morbidity due to respiratory diseases and infant mortality nationwide.

This report reveals that Mexico City has emerged as the most competitive entity, thanks to its outstanding infrastructure and high level of education. Baja California Sur and Coahuila also stand out, showing strong performance in various economic and social indicators.

On the other end, Oaxaca is positioned as the least competitive entity, as it faces serious challenges, especially in terms of foreign investment and economic complexity.

The ICE 2024 uses 50 indicators grouped into six sub-indices to assess the competitiveness of each entity. Thus, we have that:

Innovation and Economy: Chihuahua stands out for its high proportion of exports and economic complexity, while Oaxaca ranks last.

Infrastructure: Mexico City is the best connected, with a prominent rate of point-of-sale terminals and mobile banking usage. Chiapas, on the other hand, shows low results in access to mobile telephony and internet.

Labor Market: Mexico City has one of the highest average incomes for full-time workers and the highest level of education. Chiapas ranks last in average income and female labor force participation.

Society and Environment: Mexico City leads in life expectancy and availability of hospital beds, while Hidalgo ranks last in access to health services.

Law: Coahuila stands out for its low crime rates and high perception of security, unlike Zacatecas, which has the lowest result in these aspects.

Political System and Governments: Yucatán is distinguished by its regulatory improvement and low perception of corruption, while Baja California has the lowest results in citizen participation and financial transparency.

Regarding the entities preparing for elections such as Mexico City, Chiapas, Guanajuato, Jalisco, Morelos, Puebla, Tabasco, Veracruz, and Yucatán, the report highlights that they face specific challenges in security and the labor market, among others.

As a result, IMCO proposes a series of strategies to boost competitiveness at the state level, among which stand out the creation of state agencies to promote nearshoring. Developing strategies to improve access to telecommunication services and the internet, fostering relationships between industries and educational institutions, promoting the use of digital media for reporting and judicial processes, improving access to healthcare services, and focusing public debt on local productive projects.

The IMCO’s 2024 State Competitiveness Index offers a detailed overview of the strengths and weaknesses of Mexico’s federal entities. As the country recovers from the pandemic, the report underscores the need for local public policies that address the specific challenges of each region, promoting equitable and sustainable growth nationwide.

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