Portal:Business and economics/Selected economy/May 2007
From Wikipedia, the free encyclopedia
Mexico has a free market and export-oriented economy. Measured in purchasing power parity, its Gross Domestic Product recently surpassed a trillion dollars, making it the thirteenth largest economy in the world. Mexico is also firmly established as an upper middle-income country with the highest income per capita in Latin America, in market exchange rates. Mexico is the only Latin American country to be member of the Organisation for Economic Co-operation and Development.
Since the 1994 crisis subsequent administrations have improved the country's macroeconomic fundamentals. It was not influenced by the recent South American crises, and has maintained positive, though small, rate growths after the brief stagnation of 2001. Moody's (in March 2000) and Fitch IBCA (in January 2002) have issued investment-grade ratings for Mexico's sovereign debt. In spite of its unprecedented macroeconomic stability that has reduced inflation and interest rates to record lows and increased income per capita, huge gaps still remain between the urban and the rural population, the northern and the southern states, and the rich and the poor. Some of the governments challenges include the need to upgrade infrastructure, modernize the tax system and labor laws and reduce income inequality.
The economy contains a mixture of modern and outmoded industry and agriculture, both of which are increasingly dominated by the private sector. Recent administrations have expanded competition in sea ports, railroads, telecommunications, electricity generation, natural gas distribution and airports with the aim of upgrading infrastructure. Being an export-oriented economy, more 90% of its trade is under free trade agreements (FTAs), with over 40 countries including the European Union, Japan, Israel and many countries in Central and South America. The most influential FTA, however, is NAFTA, which came into effect in 1994, and was signed in 1992 by the governments of the United States, Canada and Mexico. In 2006 trade with its northern partners accounted for close to 90% of Mexico's exports and 55% of its imports
