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According to the World Bank, Mexico ranks 13th in the world in regard to GDP and has the fourth largest per capita income in Latin America just after Argentina, Chile and Costa Rica, and it is firmly established as an upper middle-income country. Since the economic crisis of 1994–1995 the country has made an impressive economic recovery. According to the director for Colombia and Mexico of the World Bank, the population below the poverty level has decreased from 24.2% to 17.6% in the general population and from 42% to 27.9% in rural areas from 2000-2004. Mexico has a mixed economy that recently entered the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. The number of state-owned enterprises in Mexico has fallen from more than 1,000 in 1982 to fewer than 100 in 2005. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Mexico is also the fourth largest oil producer in the world. A strong export sector helped to cushion the economy's decline in 1995 and led the recovery in 1996–1999. Private consumption became the leading driver of growth, accompanied by increased employment and higher wages. Mexico has entered a new era of macroeconomic stability. Following a 4.1% growth in 2004, real GDP grew 3% in 2005. According to the Bank of Mexico recent economic developments include a record-low inflation of 3.3% in 2005, low interest rates, a lower External debt to GDP ratio (8.9%) and a strong peso. Trade with the United States and Canada has tripled since NAFTA was implemented in 1994. Mexico has opened its markets to free trade like few other countries have done, lowering its trade barriers with more than 40 countries in 12 Free Trade Agreements, including Japan and the European Union. However more than 85% of the trade is still done with the United States. Government authorities expect that by putting more than 90% of trade under free trade agreements with different countries Mexico will lessen its dependence on the United States. The government is seeking to sign an additional agreement with Mercosur. Mexico still needs to overcome many structural problems as it strives to modernize its economy and raise living standards. Ongoing economic concerns include low real wages, underemployment for a large segment of the population, inequitable income distribution (top 20% of income earners account for 55% of income), and few advancement opportunities for the largely Amerindian population in the impoverished southern states. If municipalities of Mexico were classified as countries in the HDI World Ranking,San Pedro Garza Garcia, and Benito Juárez, one of the districts in the Distrito Federal, would have a similar level of development to that of Italy, whereas Metlatonoc, Guerrero, would have an HDI similar to that of Malawi. The country has continued to struggle with such issues as economic control and development, especially with the petroleum sector and the evolution of trade relations with the United States. Corruption at certain levels of the administration and crime continue to be chronic problems. |
Mexico Information: Inside
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