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Mexico Economic Report
- 1. Mexico Sarah Lopez, Zack Holden, Brenna Gomez, and Ben Pompilus
- 2. Mexico’s Economic Overview ● Population- 118.4 million ● GDP (PPP) ○ $1.8 trillion ○ 1.1% growth ○ 1.8% 5 year compound annual growth ○ 15,563 per capita ● Unemployment 5.0% ● Inflation 3.8% ● FDI Inflow 38.3 billion
- 3. Mexico’s Economic Overview Continued... ● Economic freedom score 66.4 ● 59th freest country ● Declined by .4 since last year ● Ranked third out of the three countries in the North America region, score is well above the world average ● Over last 30 years, Mexico has transitioned from a commodity- and agricultural-based economy to one dominated by manufacturing and services.
- 4. Surrounding Countries Freedom Scores ● US- 76.2, 12th freest ● Guatemala- 60.4, 87th freest ● Belize- 56.8, 117th freest
- 5. Exports ● USA (70%), Canada (5.4%), and Spain (2.1%) ● 15th largest ● Top 5 exports ● Furskins and artificial furs
- 6. Imports ● USA (47%) China (17%) , and Japan (4.9%) ● Top 5 imports ● Collector items, art, antiques
- 7. Surrounding Countries Exports + Imports Guatemala ● Export- TCT 11.4B ● Import- TCT 16.8B United States ● Export- TCT 1.23T ● Import- TCT 1.8T Belize ● Export- TCT 490M ● Import- TCT 1.25B Mexico ● Export- TCT 349B ● Import- TCT 295B
- 8. Corruption ● Fed by government ● Exist among all levels of society ● Billions of narco-dollars are crossed over the border each year from the United States ● Courts are ineffective ● Government spending has decreased
- 9. Mexican Presidency ● Enrique Peña Nieto ● Occupied positions in government ● President from 2012-Present Day
- 10. Presidential Reforms ● passed labor reform that makes it simpler for businesses to hire/fire employees ● passed educational reform to make the system based more on quality and value ● new legislation regarding telecommunications and the media have been created to try and create a broadened view and availability ● recent tax reforms should increase government income while also redistributing the tax burden ○ raising rates on the wealthiest ○ taxing capital gains and dividends ○ creating universal pensions and unemployment insurance ● focused on energy reforms, for example foreign investment in energy ● government pursued financial changes to motivate lenders to extend credit ● Mexico can take advantage of its greatest potential with a strong economic base, this includes two important economic ties: North America and the Pacific Alliance. The most important region for Mexico is and will be North America.
- 11. Mexico and US Relationship ● most important region for Mexico is and will continue to be the US ● after NAFTA, intra regional trade has multiplied ● half of this trade crosses US-Mexican border annually
- 12. Energy Reforms ● Two state-owned companies Federal Commission of Electricity and Pemex ● Energy has remained as the one important economic sectors still in state hands ● Sixth largest oil producer ● Exports 61.6% of that oil ● Estimated to increase long term oil production 75%
- 13. Conclusion/Recommendation ● Invest into Mexico! ● Impressive number of structural reforms → lifted the image according to international investors ● Energy reforms ● The oil sector, the education system, competition and labor laws, are going through significant changes that will be beneficial for Mexico. ● International markets seem to have realized that much of the groundwork has been laid for a brighter future, even though Mexico’s GDP was not the best ● Today, Mexico’s fiscal position is solid, unemployment is low and the economy has gained in competitiveness.