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flag Mexico Mexico: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Mexico is the 14th largest economy in the world and second largest economy in Latin America. Because of the economy's vulnerability to external shocks, especially to the state of the U.S. economy, the Mexican growth slowed down in 2012 (3.3%) and again in 2013 (1.2%), contrary to all predictions. According to the authorities, the crisis should only be temporary and growth should reach around 3-4% in 2014.

The year 2013 was the most difficult for the Mexican economy since 2009. Due to the weak recovery of the US economy, the Mexican trading deficit deepened sharply and remittances from Mexicans living in the US dropped by 5%, despite being the country's second largest source of foreign currency. The reduction in public spending has also been an impediment to growth. The country also suffered damaged caused by two large hurricanes. Teh country has a number of advantages: foreign investment has been booming, its public finances are healthy, state debt is contained, infaltion is stable and the banking system is solid. The discovery of new gas fields has opened new possibilities for the country and a hope to turn away from nuclear energy. The 2014 budget  The banking system is sound, and through a policy of budgetary and fiscal restraint, public debt has been contained at less than 40% of GDP and economic stability has been maintained. The discovery of gas fields in the country opens up and makes possible the withdrawal from nuclear energy. The 2014 budget is expansionist and plans on having the highest budget deficit (1.5% of the GDP) since the 2009 recession. It gives priority to infrastructures, education adn public safety and aims to encourage growth, job creation and improve the social situation. A tax increase is planned to finance unemployment insurance and pensions; the state monopoly on oil should be abandoned. A new strategy to fight against organised crime has also been adopted, since violence is hampering development.

Less than 5% unemployment is foreseen for 2014, but the informal sector is very large. Inequalities have increased, in terms of income but also in terms of exposure to natural disasters. More than 46.% of residents are poor. Insecurity related to crimes committed by drug cartels is a major problem.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 1,171.191,185.701,260.921,295.86e1,367.30
GDP (Constant Prices, Annual % Change) 4.04.01.1e2.43.5
GDP per Capita (USD) 10,12410,1291010,83711,321
General Government Balance (in % of GDP) -4.2-4.5-4.1-4.2-4.0
General Government Gross Debt (in % of GDP) 43.243.246.448.0e49.0
Inflation Rate (%) 3.44.13.8e3.9e3.6
Unemployment Rate (% of the Labor Force) 5.25.04.94.84.5
Current Account (billions USD) -12.56-15.06-25.86e-25.23e-27.74
Current Account (in % of GDP) -1.1-1.3-2.1-1.9e-2.0

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture accounts for approximately 4% of the GDP and employs 13% of the active population, however, the scarcity of credit continues to penalize this sector. Mexico ranks amongst the world's largest producers of coffee, sugar, corn, oranges, avocadoes and limes. It is also the world's 5th biggest producer of beer and its number two exporter. It is amongst the world's leading producers of many minerals, including silver, fluorite, zinc and mercury, and its oil and gas reserves are one of its most precious possessions: Mexico is the world’s fifth largest producer of oil. The oil company PEMEX is the second most powerful company in Latin America, according to the industry journal América Economía. Cattle farming and fishing are also important economic activities.

The aerospace sector has grown sharply in the last five years, due to the presences of almost 190 companies, such as Bombardier, Goodrich, the Safran group and Honeywell, which together employ 30 000 people. Mexico is also one of the 10th major car producers. The hi-tech, information and software development sectors are also experiencing a real momentum, driven by the quality of the workforce, clusters and low operating costs, which allow for the establishment of call centers.

The tertiary sector contributes to around 60% of the GDP and the construction sector has been coming up since 2010 due to significant real estate investments.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 13.4 24.1 61.9
Value Added (in % of GDP) 3.5 34.8 61.7
Value Added (Annual % Change) 0.3 -0.7 2.1

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Mexican Peso (MXN) - Average Annual Exchange Rate For 1 USD 13.5112.6412.4213.1712.77

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Mexico on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
66.8/100
Position:
Moderately Free
World Rank:
55/178
Regional Rank:
3/3

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.91
World Rank:
32/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Mexico is one of the countries that most depends on foreign trade. Foreign trade represents around 64% of its GDP (WTO 2010-2012). Mexico has signed 12 free-trade agreements with about forty different countries of the world. It has been a member of NAFTA - the free-trade agreement that unifies the United States, Mexico and Canada, since 1994. The country signed a free trade agreement with the European Union in 2000 and a commercial agreement with Japan came into force in April 2005.

The United States buys 80% of Mexico's exports. Its main export partners are the NAFTA and the European Union. The main export goods are electrical and electronic equipment, vehicles, mineral fuels, oil and machinery. Its three main import partners are the NAFTA, China and Japan. It mainly imports electrical and electronics equipment, machinery, vehicles and plastic products.

After reaching its frist trade surplus since fifteen years in 2012, Mexico registered a 1 billion USD trade deficit in 2013, due to weak economic growth and the slow recovery of the US economy.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 241,515310,205361,068380,477390,965
Exports of Goods (million USD) 229,712298,305349,569370,827380,189
Imports of Services (million USD) 21,40222,29025,93426,54027,649
Exports of Services (million USD) 15,42015,23315,58116,14619,591
Imports of Goods and Services (Annual % Change) -17.620.58.05.41.2
Exports of Goods and Services (Annual % Change) -11.820.58.25.91.4
Imports of Goods and Services (in % of GDP) 28.831.132.533.732.4
Exports of Goods and Services (in % of GDP) 27.329.931.232.631.7
Trade Balance (million USD) -4,926-2,943-1,205291-898
Trade Balance (Including Service) (million USD) -15,144-13,500-15,998-14,271-12,917
Foreign Trade (in % of GDP) 56.060.963.766.464.2

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
United States 78.9%
Canada 2.7%
Spain 1.9%
China 1.7%
Brazil 1.4%
See More Countries 13.3%
Main Suppliers
(% of Imports)
2013
United States 49.3%
China 16.1%
Japan 4.5%
South Korea 3.5%
Germany 3.5%
See More Countries 23.1%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 11.2%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 8.5%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 5.4%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 4.8%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 4.6%
See More Products 65.4%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 6.6%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 5.4%
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 3.5%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 2.6%
Parts suitable for use solely or principally with...Parts suitable for use solely or principally with transmission and reception apparatus for radio-telephony, radio-telegraphy, radio-broadcasting, television, television cameras, still image video cameras and other video camera recorders, radar apparatus, radio navigational aid apparatus or radio remote control apparatus, n.e.s. 2.5%
See More Products 79.3%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2012
78.90%
12.48%
5.95%
1.58%
0.59%
0.50%
- bn USD of services imported in 2012
39.32%
27.71%
12.95%
12.93%
3.67%
1.02%
0.89%
0.89%
0.61%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Ministry of the Economy
Ministry of Social Development
Ministry of Finance
Ministry of Energy
Statistical Office
National Institute of Statistics and Geography
Central Bank
Bank of Mexico
Stock Exchange
Mexican Stock Exchange
Search Engines
Yahoo Mexico
Buscador
Explora Mexico
Mexico Channel
Mexico Global
Mexico Online
Mexico Web
Mexsearch
Mxsearch
Sbel
Economic Portals
Trade in Mexico

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Political Outline

Executive Power
As established by the Constitution, the Executive power is headed by the President of the United Mexican States.
The President is both head of state and head of government.  He is Supreme Commander of the Army Force.
The President is elected by popular vote and cannot be reelected. The presidential term lasts six years.
Legislative Power
The Mexican legislative power is in the hands of the General Congress  which is divided in two chambers: the Deputies and the Senators.
The Chamber of Deputies has 500 members, from which 300 are elected according to the principle of plurality. The remaining 200 are elected through the rule of proportional representation.
The Chamber of Senators applies in the same manner the principle of proportional representation by integration, electing 32 of its 96 members every two years.
Main Political Parties
Mexico has a multi-party system. There are three major political parties in the country:
- PAN (National Action Party) – a conservative liberal party.
- PRI (Institutional Revolutionary Party) - the oldest political party in the country, it governed for 70 years, it is the center or middle party.
- PRD (Party of the Democratic Revolution)- a left wing socialist party.
Current Political Leaders
President: Enrique Peña Nieto (since 1st december 2012) - PRI
Next Election Dates
Presidential: July 2018
Senate: 2018
Chamber of Deputies: 2015
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
152/180
Evolution:
1 place up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
3/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014