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Mexico Economy

    Economy—overview: Mexico has a free market economy with 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 200 in 1998. The ZEDILLO administration is privatizing and expanding competition in sea ports, railroads, telecommunications, electricity, natural gas distribution, and airports. A strong export sector helped to cushion the economy's decline in 1995 and led the recovery in 1996 and 1997. In 1998, private consumption became the leading driver of growth, which was accompanied by increased employment and higher wages. The government expects the economy to slow in 1999 because of low commodity prices, tighter international liquidity, and slacker demand for exports. Mexico still needs to overcome many structural problems as it strives to modernize its economy and raise living standards. Income distribution is very unequal, with the top 20% of income earners accounting for 55% of income. Trade with the US and Canada has nearly doubled since NAFTA was implemented in 1994. Mexico is pursuing additional trade agreements with most countries in Latin America and with the EU to lessen its dependence on the US.

    GDP: purchasing power parity—$815.3 billion (1998 est.)

    GDP—real growth rate: 4.8% (1998 est.)

    GDP—per capita: purchasing power parity—$8,300 (1998 est.)

    GDP—composition by sector:
    agriculture: 6%
    industry: 26%
    services: 68% (1997)

    Population below poverty line: 27% (1998 est.)

    Household income or consumption by percentage share:
    lowest 10%: 1.8%
    highest 10%: 36.6% 1996)

    Inflation rate (consumer prices): 18.6% (1998)

    Labor force: 37.5 million (1998)

    Labor force—by occupation: services 28.8%, agriculture, forestry, hunting, and fishing 21.8%, commerce 17.1%, manufacturing 16.1%, construction 5.2%, public administration and national defense 4.4%, transportation and communications 4.1%

    Unemployment rate: 2.6% (1998) urban; plus considerable underemployment

    Budget:
    revenues: $117 billion
    expenditures: $123 billion, including capital expenditures of $NA (1998 est.)

    Industries: food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism

    Industrial production growth rate: 6% (1998 est.)

    Electricity—production: 154.395 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 71.46%
    hydro: 20.16%
    nuclear: 4.85%
    other: 3.53% (1996)

    Electricity—consumption: 154.448 billion kWh (1996)

    Electricity—exports: 1.263 billion kWh (1996)

    Electricity—imports: 1.316 billion kWh (1996)

    Agriculture—products: corn, wheat, soybeans, rice, beans, cotton, coffee, fruit, tomatoes; beef, poultry, dairy products; wood products

    Exports: $117.5 billion (f.o.b., 1998), includes in-bond industries (assembly plant operations with links to US companies)

    Exports—commodities: crude oil, oil products, coffee, silver, engines, motor vehicles, cotton, consumer electronics

    Exports—partners: US 87.5%, Canada 1.3%, Japan 0.8%, Spain 0.6%, Chile 0.6%, Brazil 0.5% (1998 est.)

    Imports: $111.5 billion (f.o.b., 1998), includes in-bond industries (assembly plant operations with links to US companies)

    Imports—commodities: metal-working machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft, and aircraft parts

    Imports—partners: US 74.2%, Japan 3.7%, Germany 3.7%, Canada 1.8%, South Korea 1.5%, Italy 1.3%, France 1.2% (1998 est.)

    Debt—external: $154 billion (1997)

    Economic aid—recipient: $1.166 billion (1995)

    Currency: 1 New Mexican peso (Mex$) = 100 centavos

    Exchange rates: Mexican pesos (Mex$) per US$1—10.1104 (January 1999), 9.1360 (1998), 7.9141 (1997), 7.5994(1996), 6.4194 (1995), 3.3751 (1994)

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)