Today’s Mexico is large, diversified, and growing stronger.
Ahead of our World Economic Forum on Latin America 2015, which takes place in Riviera Maya, Mexico from 6-8 May, here’s what you need to know about the current state of the Mexican economy, in 10 facts and figures.
1) Mexico has a $1.26 trillion economy, making it the 15th largest economy in the world, and the 11th taking into account power purchasing parity. This makes Mexico a so-called “middle power”: falling just short of being a G7 economy, it is nevertheless an economic power to be reckoned with.
2) With its 122 million inhabitants, the GDP per capita currently stands at about $10,000, placing it firmly in the “upper middle income” countries. Adjusted for purchasing power, the GDP per capita is about 60% higher, at roughly $16,000. That puts it in the same league with countries like Turkey, Romania, and Brazil, but still far below countries like the U.S. ($55,000) or Switzerland ($58,000)
3) Economic growth is forecasted to rebound to 3.5% in 2015, more or less in line with compounded average annual growth in the years following the global financial crisis of 2008-2009. Before that, growth averaged about 4-5% per year. The country faced its last severe economic crisis in 1994.
4) Despite the positive forecasts, the Mexican economy faced a number of challenges in recent years. Growth was under 2% in 2013, and under 3% in 2014. The price of commodities, important for Mexico’s income from exports, has been falling in what has been called “the end of the commodity super cycle”.
5) The government of Enrique Peña Nieto, which came to power in December 2012, has been pressing ahead with what has been seen by many as an “ambitious reform agenda.” This includes an overhaul of the taxing system, cuts in government spending, and the liberalisation of certain economic sectors such as energy and telecommunications.
6) Mexico is traditionally seen as a commodities and manufacturing giant. It has the largest proven silver reserves in the world, and the tenth largest oil reserves. PEMEX, the state-owned oil company, is one of the largest oil producers in the world, with revenues of about $130 billion.
7) Due to rising wages and less favourable trade terms, Mexico recently gained competitiveness as a automobile exporter. Large automotive companies such as Volkswagen, Toyota, Nissan, Ford, General Motors and Fiat Chrysler have increased their production in Mexico recently, or have announced their intentions to do so.
8) Thanks to its membership of the North American Free Trade Association (NAFTA), Mexico has been able to become one of the United States’ largest trade partners. It exports mostly manufactured goods, industrial goods, and automobiles. It has a positive trade balance with the United States, and as a consequence, has become one of the largest holders of U.S. treasury bonds.
9) Mexico became the first Latin American country to enter the Organisation for Economic Co-operation and Development (OECD) in 1994. It was later joined by Chile. Colombia is in talks to join the OECD as well. The current president of the OECD is a Mexican, Jose Angel Gurria.
10) Mexico is the OECD country with the second highest degree of economic disparity between the rich and the poor, behind Chile. The bottom 10% on the income rung disposes of 1.36% of the country’s resources, whereas the upper 10% dispose of almost 36%. Twenty-six percent of GDP comes from the informal economy, a part of the economy in which almost 60% of the workforce is active.
The World Economic Forum on Latin America 2015 takes place in Riviera Maya, Mexico, from 6-8 May.
Author: Peter Vanham is Senior Media Manager at World Economic Forum.
Image: New Ford vehicles are seen at a parking lot of the Ford factory in Sao Bernardo do Campo, Mexico. February 12, 2015. REUTERS/Paulo Whitaker