Mexico’s Economy

Mexico is a major economic power in Latin America, a member of the North American Free Trade Area, and one of the most open economies in the world. It has signed free trade agreements with 45 countries. There are complete industrial categories, with petrochemical, electric power, mining, metallurgy and manufacturing industries being relatively developed. In 2014, the GDP growth was 2.1%, the inflation rate was 4.08%, and the unemployment rate was 4.83%. In 2015, Mexico's economy grew by 2.5%.

Mexico has modern industry and agriculture, and the proportion of the private economy is gradually increasing. After the late 1990s, the Mexican Railways Bureau was disintegrated and privatized. The number of state-owned enterprises decreased from more than 1,000 in 1982 to less than 200 in 1999. The government pursued privatization of the economy and encouraged competition in seaports, railways, communications, electricity, natural gas, and airport services.

In 1986, Mexico joined the General Agreement on Tariffs and Trade and began the transformation from an inward-oriented development model to an export-oriented development model. Since then, the Mexican government has vigorously implemented measures of adjustment, reform, privatization, and opening up to the outside world. As a result, in 1995, the Mexican economy has maintained medium-to-low growth for many consecutive years. International reserves and foreign investment have continued to increase, inflation has dropped to single digits, and the fiscal deficit has turned into a profit. The debt ratio has reached normal values, and imports and exports have increased significantly; but on the other hand, it has also formed a situation of excessive imports and mainly relying on foreign short-term capital to balance the excessive economic project deficit. On January 1, 1994, Mexico officially joined the North American Free Trade Area. In December of the same year, due to the intensification of internal conflicts within the ruling party and political turmoil, foreign businessmen's confidence was shaken and they withdrew their investment. This led to a sharp devaluation of the currency and the outbreak of a financial crisis. In 1996, with the support of a large amount of emergency assistance from the United States and international financial institutions, the Zedillo government adopted measures such as strict fiscal discipline, rectification of the financial system, further adjustment of the economic structure, and implementation of medium- and long-term economic development plans, which enabled the Mexican economy to survive the emergency. status stage. Financial markets continue to perform well, interest rates are gradually lowered, the currency market is stable, public finances are balanced and in surplus, foreign trade has increased significantly, the balance of payments has fundamentally improved, foreign debt repayments have been smooth, and foreign exchange reserves have increased significantly.

Mexico is one of the countries in the G20 (Group of 20). Mexico mainly exports crude oil, industrial products, petroleum products, clothing, agricultural products, etc. The main export destinations are the United States, Canada, the European Union, Central America, China, etc.; Mexico mainly imports food, pharmaceutical products, communication equipment, etc. The main import source countries For the United States, China, Germany, Japan, South Korea, etc. In 2015, Mexico's total import and export volume was US$776 billion, a year-on-year decrease of 2.6%, of which exports were US$380.77 billion, a year-on-year decrease of 4.1%, becoming the first negative growth since 2009; imports were US$395.23 billion, a year-on-year decrease of 1.2%.

The long history and culture, unique plateau customs and cultural landscapes, and long coastline have provided Mexico with unique favorable conditions for the development of tourism. The tourism industry, which ranks first in Latin America, has become one of Mexico's main sources of foreign exchange earnings. Tourism revenue in 2001 reached US$8.4 billion. Mexico City, Acapulco, Tijuana, Cancun, etc. are all famous tourist destinations.

The United States, Canada and Mexico reached an agreement on the North American Free Trade Agreement on August 12, 1992, and it was officially signed by the leaders of the three countries in their respective countries on December 17 of the same year. On January 1, 1994, the agreement officially came into effect and the North American Free Trade Area was announced. The purpose of the agreement is to remove trade barriers; create fair conditions and increase investment opportunities; protect intellectual property rights; establish an effective mechanism to implement the agreement and resolve trade disputes, and promote trilateral and multilateral cooperation. The signing of the North American Free Trade Agreement will have a major impact on the economies of North American countries and even the world. The United States is Mexico's largest trading partner and source of investment. Bilateral trade accounts for 70% of Mexico's total foreign trade, exports to the United States account for 83% of Mexico's total exports, and U.S. capital accounts for more than 65% of Mexico's total foreign investment.

Mexico’s main economic sectors (petroleum industry, manufacturing, export processing industry, textile and garment industry, etc.) are all facing the US market. In addition, overseas immigrant remittances (mainly from the United States) have become Mexico's second largest source of foreign exchange after oil revenue. Therefore, Mexico is deeply dependent on the United States, and the economic situation of the United States often determines Mexico's economic development. For example, since 2001, the Mexican economy has shown stagnation due to the recession in the United States. The economic growth rates from 2001 to 2003 were -0.1%, 0.7% and 1.3% respectively, with an average annual growth rate of only 0.6%. Since 2004, as the economic situation of various countries around the world has generally improved, especially the good growth momentum of the United States, the Mexican economy has also shown signs of recovery. Therefore, due to the existence of these problems, Mexico's domestic evaluation of NAFTA is also mixed, and its support for it also fluctuates.