Mexico’s informal economy reaches record share of GDP

Mexico’s informal economy has reached its largest recorded share of national output, accounting for 25.2% of GDP in the first quarter of 2026. The figure marks the highest participation since comparable information became available in 2005.

The sector also outpaced the wider economy. Informal activity grew 2% from January through March compared with the same quarter a year earlier, while Mexico’s national GDP expanded 0.2%, according to the Quarterly Measurements of the Informal Economy by Federal Entity released by the National Institute of Statistics and Geography, or Inegi.

Hidalgo led the country in growth after informal activity increased 8.4% after adjusting for inflation. The State of Mexico followed with 6.2%, and Nuevo León with 5.7%. Analysts at Banamex said informal activity rebounded across much of the country during the quarter, although Campeche recorded a decline for the fifth consecutive quarter.

“

The situation worsens in situations of conflict and fragility, where there is no alternative but to operate in the informal economy to secure a livelihood.

Paid jobs in the informal economy reached 16.4 million. The State of Mexico accounted for 12.6% of that total, or 2.1 million positions.

The International Labour Organization defines the informal economy as a range of economic activities, businesses and workers that the state does not regulate or protect. It includes self-employed workers in small unregistered businesses and employees whose jobs lack legal or regulatory protection. The organization links its expansion mainly to high unemployment, underemployment, poverty, gender inequality and precarious work. It also warns that informal economies often involve poor-quality jobs, inadequate social protection, weak governance and low productivity.

“

In addition to a high incidence of poverty, informal economies are characterized by serious deficits in decent work.