Mexico: Economic and Political Outline

Economic Overview

Mexico is the 14th largest economy in the world and second largest economy in Latin America. Although its GDP fell sharply in 2009 (-6.5%), economic growth rebounded in 2010 (5.5%), and continued in 2011. Vulnerable to external shocks, including the state of the U.S. economy, Mexican growth should slow down in 2012, to around 3.3%.

The outlook for the Mexican economy remains favorable. The banking system is sound, and through a policy of budgetary and fiscal restraint, public debt has been contained at about 32% 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, as announced by the Minister of Energy. But the country is heavily dependent on oil revenues and remittances from migrants living in the United States. Lack of education and violence are also hampering its development.

Less than 5% unemployment is foreseen for 2012, but the informal sector is very large. Inequalities have increased, in terms of income but also in terms of exposure to natural disasters. 46.2% of residents are poor. Insecurity related to crimes committed by drug cartels is a major problem.

Main Sectors of Industry

Agriculture accounts for approximately 4% of the GDP and employs 13.5% 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. Mexico is 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 is coming up again due to real estate investments.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

67.8/100

Position:

Moderately free

World Rank:

44/179

Regional Rank:

3/3

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: 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.

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

Other Useful Resources

Ministries of Mexico
National Institute of Statistics and Geography

Main Online Newspapers

Finance
Economy
Universal

Economic Portals

Trade in Mexico

Political Outline

Type of State

Mexico's official name is Mexican United States. It is a federal republic based on presidential democracy.

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, to which the actual President of the Republic belongs.
- 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 : Felipe Calderón Hinojosa elected on July 2, 2006, member of  PAN

Next Election Dates

Presidential: July 2012
Senate: July 2012
Chamber of Deputies: 2012

Indicator of Freedom of the Press

World Rank:

149/179

Evolution:

13 places down compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: 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 is 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.).