Economy of Mexico - AbsoluteAstronomy.com

The economy of Mexico

Mexico

The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

is the 13th largest in the world in nominal terms and the 11th by purchasing power parity, according to the World Bank.
Since the 1994 crisis

1994 economic crisis in Mexico

The 1994 Economic Crisis in Mexico, widely known as the Mexican peso crisis, was caused by the sudden devaluation of the Mexican peso in December 1994....

, administrations have improved the country's macroeconomic fundamentals

Macroeconomics

Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...

. Mexico was not significantly influenced by the recent 2002 South American crisis

South American economic crisis of 2002

The South American Economic Crisis is the economic disturbances which have developed in 2002 in the South American countries of Argentina, Brazil and Uruguay....

, and maintained positive, although low, rates of growth after a brief period of stagnation in 2001. However, Mexico was one of the Latin American nations most affected by the 2008 recession with its Gross Domestic Product contracting by more than 6%. Moody's

Moody's

Moody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...

(in March 2000) and Fitch IBCA (in January 2002) issued investment-grade ratings for Mexico's sovereign debt. In spite of its unprecedented macroeconomic stability, which has reduced inflation and interest rates to record lows and has increased per capita income, enormous gaps remain between the urban and the rural population, the northern and southern states, and the rich and the poor. Some of the government's challenges include the upgrade of infrastructure, the modernization of the tax system and labor laws, and the reduction of income inequality.

The economy contains rapidly developing modern industrial and service sectors, with increasing private ownership. Recent administrations have expanded competition in ports, railroads, telecommunications, electricity generation

Electricity sector in Mexico

The energy sector in Mexico has certain limitations in terms of private participation and foreign companies are allowed to operate in the country only through specific service contracts. As required by the Constitution, the electricity sector is federally owned, with the Federal Electricity...

, natural gas distribution and airports, with the aim of upgrading infrastructure. As an export-oriented economy, more than 90% of Mexican trade is under free trade agreements (FTAs) with more than 40 countries, including the European Union, Japan, Israel, and much of Central

Central America

Central America is the central geographic region of the Americas. It is the southernmost, isthmian portion of the North American continent, which connects with South America on the southeast. When considered part of the unified continental model, it is considered a subcontinent...

and South America. The most influential FTA is the North American Free Trade Agreement

North American Free Trade Agreement

The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...

(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 Mexico's two northern partners accounted for almost 90% of its exports and 55% of its imports. Recently, the Congress of the Union approved important tax, pension and judicial reforms, and reform to the oil industry is currently being debated. According to the Forbes Global 2000 list of the world's largest companies in 2008, Mexico had 16 companies in the list.

The annual Mexico Investment Summit takes place in Mexico City

Mexico City

Mexico City is the Federal District , capital of Mexico and seat of the federal powers of the Mexican Union. It is a federal entity within Mexico which is not part of any one of the 31 Mexican states but belongs to the federation as a whole...

covering the development and investment opportunities and challenges across Mexican private equity, venture capital, infrastructure, real estate, agriculture, tourism, energy and natural resources evolving in the country's economy.

History

Mexican president Porfirio Díaz

Porfirio Díaz

José de la Cruz Porfirio Díaz Mori was a Mexican-American War volunteer and French intervention hero, an accomplished general and the President of Mexico continuously from 1876 to 1911, with the exception of a brief term in 1876 when he left Juan N...

brought unprecedented economic growth during the last quarter of the nineteenth century. This growth was accompanied by foreign investment and European immigration, the development of an efficient railroad network and the exploitation of the country's natural resources. Annual economic growth between 1876 and 1910 averaged 3.3%. Political repression and fraud, as well as huge income inequalities exacerbated by the land distribution system based on latifundios
Latifundia
Latifundia are pieces of property covering very large land areas. The latifundia of Roman history were great landed estates, specializing in agriculture destined for export: grain, olive oil, or wine...

, in which large hacienda

Hacienda

Hacienda is a Spanish word for an estate. Some haciendas were plantations, mines, or even business factories. Many haciendas combined these productive activities...

s were owned by a few but worked by millions of underpaid peasants living in precarious conditions, led to the Mexican Revolution

Mexican Revolution

The Mexican Revolution was a major armed struggle that started in 1910, with an uprising led by Francisco I. Madero against longtime autocrat Porfirio Díaz. The Revolution was characterized by several socialist, liberal, anarchist, populist, and agrarianist movements. Over time the Revolution...

(1910–1917), an armed conflict that drastically transformed Mexico's political, social, cultural, and economical structure during the twentieth century under a premise of social democracy. The war itself, however, left a harsh toll in the economy and population, which decreased over the 11-year period between 1910 and 1921. The reconstruction of the country was to take place in the following decades.

The period from 1930 to 1970 was dubbed by economic historians as the "Mexican Miracle", a period of economic growth spurred by a model of import substitution industrialization (ISI) which protected and promoted the development of national industries. Through the ISI model, the country experienced an economic boom through which industries rapidly expanded their production. Important changes in the economic structure included free land distribution to peasants under the concept of ejido
Ejido
The ejido system is a process whereby the government promotes the use of communal land shared by the people of the community. This use of community land was a common practice during the time of Aztec rule in Mexico...

, the nationalization of the oil and railroad companies, the introduction of social rights into the constitution, the birth of large and influential labor unions, and the upgrading of infrastructure. While population doubled from 1940 to 1970, GDP increased sixfold.

The ISI model had reached its peaked in the late 1960s. During the 1970s, the administrations of Echeverría

Luis Echeverría

Luis Echeverría Álvarez served as President of Mexico from 1970 to 1976.-Early history:Echeverría joined the faculty of the National Autonomous University of Mexico in 1947 and taught political theory...

and López Portillo

José López Portillo

José López Portillo y Pacheco was the President of Mexico from 1976 to 1982.Born in Mexico City, López Portillo studied Law at the National Autonomous University of Mexico before beginning his political career with the Institutional Revolutionary Party in 1959.He held several positions in the...

, tried to include social development in their policies, an effort that entailed more public spending. With the discovery of vast oil fields in a time in which oil prices were surging and international interest rates were low -and even negative- the government decided to borrow from international capital markets to invest in the state-owned oil company, which in turn seemed to provide a long-run income source to promote social welfare. In fact, this method produced a remarkable growth in public expenditure, and president López Portillo announced that the time had come to learn to "manage prosperity" as Mexico multiplied its oil production to become the world's fourth largest exporter.

Average annual GDP growth by period
1900–1929	3.4%
1929–1945	4.2%
1945–1972	6.5%
1972–1981	5.5%
1981–1995	1.5%
1995–2000	5.1%
2000–2011	1.6%
Sources:

In the period of 1981–1982 the international panorama changed abruptly: oil prices plunged

1980s oil glut

The 1980s oil glut was a serious surplus of crude oil caused by falling demand following the 1970s Energy Crisis. The world price of oil, which had peaked in 1980 at over US$35 per barrel , fell in 1986 from $27 to below $10...

and interest rates rose. In 1982, president López Portillo, just before ending his administration, suspended payments of foreign debt, devalued the peso

Mexican peso

The peso is the currency of Mexico. Modern peso and dollar currencies have a common origin in the 15th–19th century Spanish dollar, most continuing to use its sign, "$". The Mexican peso is the 12th most traded currency in the world, the third most traded in the Americas, and by far the most...

and nationalized the banking system, along with many other industries that were severely affected by the crisis, among them the steel industry. While import substitution had produced an era of industrialization in previous decades, by the 1980s it was evident that that protracted protection had produced an uncompetitive industrial sector with low productivity gains.

President de la Madrid

Miguel de la Madrid

Miguel de la Madrid Hurtado is a Mexican politician affiliated to the Institutional Revolutionary Party who served as President of Mexico from 1982 to 1988.-Biography:...

was the first of a series of presidents that began to implement neoliberal

Neoliberalism

Neoliberalism is a market-driven approach to economic and social policy based on neoclassical theories of economics that emphasizes the efficiency of private enterprise, liberalized trade and relatively open markets, and therefore seeks to maximize the role of the private sector in determining the...

reforms. After the crisis of 1982, lenders were unwilling to return to Mexico and, in order to keep the current account in balance, the government resorted to currency devaluations, which in turn sparked unprecedented inflation, which reached a historic high in 1987 at 159.7%.

The first step toward the liberalization of trade was Mexico's signature of the General Agreement on Tariffs and Trade

General Agreement on Tariffs and Trade

The General Agreement on Tariffs and Trade was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization . GATT was signed in 1947 and lasted until 1993, when it was replaced by the World...

(GATT) in 1986. During the Salinas administration many state-owned companies were privatized. In 1992, the North American Free Trade Agreement

North American Free Trade Agreement

was signed between the United States, Canada and Mexico, and after the signature of two additional supplements on environments and labor standards, it came into effect on January 1, 1994. Salinas also introduced strict price controls and negotiated smaller minimum wage increments with labor unions with the aim of curbing inflation. While his strategy was successful in reducing inflation, growth averaged only 2.8 percent a year. Moreover, by fixing the exchange rate, the peso became rapidly overvalued while consumer spending increased, causing the current account deficit to reach 7% of GDP in 1994. The deficit was financed through tesobonos a type of public debt instrument that reassured payment in dollars. The Chiapas uprising

Zapatista Army of National Liberation

The Zapatista Army of National Liberation is a revolutionary leftist group based in Chiapas, the southernmost state of Mexico....

, and the assassinations of the ruling party's presidential candidate, Luis Donaldo Colosio

Luis Donaldo Colosio

Luis Donaldo Colosio Murrieta was a Mexican politician, and PRI presidential candidate, who was assassinated at a campaign rally in Tijuana during the Mexican Presidential campaign of 1994.-Political history:...

and the Secretary-General of the party and brother of the Assistant-Attorney General

Attorney General (Mexico)

The Attorney General of Mexico is the head of the Office of the General Prosecutor and the Federal Public Ministry , an institution belonging to the Federal executive branch that is responsible for the investigation and prosecution of...

José Francisco Ruiz Massieu

José Francisco Ruiz Massieu was a Mexican political figure. He was governor of Guerrero from 1987 to 1993. He then served as the secretary-general of the Institutional Revolutionary Party in 1994...

in 1994, sent a disquieting message to investors. Public debt holders rapidly sold their tesobonos, depleting the Central Bank's reserves, while portfolio investments, which had made up 90% of total investment flows, left the country as fast as they had come in. This unsustainable situation eventually forced the entrant Zedillo administration to abandon the fixed exchange rate. The peso sharply devalued and the country entered into an economic crisis in December 1994

1994 economic crisis in Mexico

The 1994 Economic Crisis in Mexico, widely known as the Mexican peso crisis, was caused by the sudden devaluation of the Mexican peso in December 1994....

. The boom in exports, as well as an international rescue package crafted by American president Bill Clinton

Bill Clinton

William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...

, helped cushion the crisis. In less than 18 months, the economy was growing again, and annual rate growth averaged 5.1 percent between 1995 and 2000.

President Zedillo

Ernesto Zedillo

Ernesto Zedillo Ponce de León is a Mexican economist and politician. He served as President of Mexico from December 1, 1994 to November 30, 2000, as the last of the uninterrupted seventy year line of Mexican presidents from the Institutional Revolutionary Party...

and president Fox

Vicente Fox

Vicente Fox Quesada is a Mexican former politician who served as President of Mexico from 1 December 2000 to 30 November 2006 and currently serves as co-President of the Centrist Democrat International, an international organization of Christian democratic political parties.Fox was elected...

continued with trade liberalization and during his administrations several FTAs were signed with Latin American and European countries, Japan and Israel, and both strove to maintain macroeconomic stability. Thus, Mexico became one of the most open countries in the world to trade, and the economy base shifted accordingly. Total trade with the United States and Canada tripled, and total exports and imports almost quadrupled between 1991 and 2003. The nature of foreign investment also changed from portfolio to foreign-direct investment (FDI).

Macroeconomic, financial and welfare indicators

GDP per capita PPP Purchasing power parity In economics, purchasing power parity is a condition between countries where an amount of money has the same purchasing power in different countries. The prices of the goods between the countries would only reflect the exchange rates...	US $14,900 (2008)
GNI per capita PPP Purchasing power parity In economics, purchasing power parity is a condition between countries where an amount of money has the same purchasing power in different countries. The prices of the goods between the countries would only reflect the exchange rates...	US $11,990 (2006)
Inflation (CPI Consumer price index A consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of... )	3% (2007)
Gini index	44.5
Unemployment	3.7% (2007)
HDI Human Development Index The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...	0.750
Labor force	45.38 million (2007)
Pop. in poverty	13.8%

Main indicators

Mexico's Gross Domestic Product (GDP) in purchasing power parity

Purchasing power parity

In economics, purchasing power parity is a condition between countries where an amount of money has the same purchasing power in different countries. The prices of the goods between the countries would only reflect the exchange rates...

(PPP) was estimated at US $1.463 trillion in 2009, and $874.8 billion

1000000000 (number)

1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....

in nominal exchange rates. As such, its standard of living, as measured in GDP in PPP per capita was US $13,200. The World Bank reported in 2009 that the country's Gross National Income

Gross National Income

The GNI consists of: the personal consumption expenditures, the gross private investment, the government consumption expenditures, the net income from assets abroad , and the gross exports of goods and services, after deducting two components: the gross imports of goods and services, and the...

in market exchange rates was the second highest in Latin America, after Brazil

Brazil

Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

at US $962.076 billion, which lead to the highest income per capita

Gross National Income

in the region at $8,960. As such, Mexico is now firmly established as an upper middle-income country. After the slowdown of 2001 the country has recovered and has grown 4.2, 3.0 and 4.8 percent in 2004, 2005 and 2006, even though it is considered to be well below Mexico's potential growth.

The Mexican currency is the peso

Peso

The word peso was the name of a coin that originated in Spain and became of immense importance internationally...

(ISO 4217

ISO 4217

ISO 4217 is a standard published by the International Standards Organization, which delineates currency designators, country codes , and references to minor units in three tables:* Table A.1 – Current currency & funds code list...

: MXN; symbol: $). One peso is divided into 100 centavos (cents). MXN replaced MXP in 1993 at a rate of 1000 MXP per 1 MXN. The exchanged rate has remained stable since 1998, oscillating between 9.20 and 11.50 MXN per US$. Interest rates in 2007 were situated at around 7 percent, having reached a historic low in 2002 below 5 percent. Inflation rates are also at historic lows; the inflation rate in Mexico in 2006 was 4.1 percent, and 3 percent by the end of 2007. Unemployment rates are the lowest of all OECD member countries at 3.2 percent. However, underemployment is estimated at 25 percent. Mexico's Human development index

Human Development Index

The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...

was reported at 0.829, (comprising a life expectancy index of 0.84, an education index of 0.86 and a GDP index of 0.77), ranking 52 in the world within the group of high-development.

Poverty

After the 1994–1995 economic crisis, probably the most severe in the country's history, 50% of the population fell into poverty. A rapid growth in exports propitiated by NAFTA and other trade agreements, and the restructuring of the macroeconomic finances initiated during Zedillo's and continued during Fox's administration had significant results in the reduction of the poverty rate: according to the World Bank, poverty was reduced from 24.2% in 2000 to 17.6% in 2004. Most of this reduction was achieved in rural communities whose rate of poverty declined from 42% to 27.9% in the 2000–2004 period, although urban poverty stagnated at 12%. According to the World Bank, in 2004, 17.6% of Mexico's population lived in extreme poverty, while 21% lived in moderated poverty. The CIA Factbook, on the other hand, reported that 13.8% of the population was under the poverty line, as measured in food-based poverty. See Feed the Children Vallarta

Feed the Children Vallarta

Feed the Children Vallarta is a non-profit tax exempt charitable corporation based in the city of Puerto Vallarta, Jalisco, Mexico. Founded in 1998 as “Desayunos Para Los Niños de Vallarta A.C” or as it soon came to be known simply as “Children of the Dump Vallarta".Since its inception in 1998,...

Remittances

A remittance is a transfer of money by a foreign worker to his or her home country. Note that in 19th century usage a remittance man was someone exiled overseas and sent an allowance on condition that he not return home....

, or contributions sent by Mexicans living abroad, mostly in the United States, to their families at home in Mexico, are a substantial and growing part of the Mexican economy; they comprised $18 billion in 2005. In 2004, they became the tenth largest source of foreign income after oil, industrial exports, manufactured goods, electronics, heavy industry, automobiles, construction, food, and banking & financial services. Larger than tourism expenditures; and represented 2.1 percent of the nation's Gross Domestic Product. The growth of remittances has been remarkable: they have more than doubled since 1997. Recorded remittance transactions exceeded 41 million in 2003, of which 86 percent were made by electronic transfer.

The Mexican government, cognizant of the economic viability of immigrant workers, began issuing an upgraded version of the Matrícula Consular de Alta Seguridad (MACS, High Security Consular Identification), an identity document issued at Mexican consulates abroad. This document is now accepted as a valid identity card in 32 US states, as well as thousands of police agencies, hundreds of cities and counties, as well as banking institutions.

The main receptors of remittances in 2004 were the states of Michoacán

Michoacán

Michoacán officially Estado Libre y Soberano de Michoacán de Ocampo is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 113 municipalities and its capital city is Morelia...

, Guanajuato

Guanajuato

Guanajuato officially Estado Libre y Soberano de Guanajuato is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 46 municipalities and its capital city is Guanajuato....

, Jalisco

Jalisco

Jalisco officially Estado Libre y Soberano de Jalisco is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is located in Western Mexico and divided in 125 municipalities and its capital city is Guadalajara.It is one of the more important states...

, Mexico and Puebla

Puebla

Puebla officially Estado Libre y Soberano de Puebla is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 217 municipalities and its capital city is Puebla....

, which jointly captured 45% of total remittances in that year. Several state governments, with the support of the federal government, have implemented programs to use part of the remittances to finance public works. This program, called Dos por Uno (Two for every one) is designed in a way that for each peso contributed by migrants from their remittances, the state and the federal governments will invest two pesos in building infrastructure at their home communities.

Regional economies

Regional disparities and income inequality continue to be a problem in Mexico. While all constituent states of the federation have a Human Development Index

Human Development Index

(HDI) superior to 0.70 (medium to high development), northern and central states have higher levels of HDI than the southern states. Nuevo León

Nuevo León

Nuevo León It is located in Northeastern Mexico. It is bordered by the states of Tamaulipas to the north and east, San Luis Potosí to the south, and Coahuila to the west. To the north, Nuevo León has a 15 kilometer stretch of the U.S.-Mexico border adjacent to the U.S...

, Campeche

Campeche

Campeche is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. Located in Southeast Mexico, it is bordered by the states of Yucatán to the north east, Quintana Roo to the east, and Tabasco to the south west...

and the Federal District

Mexico City

have HDI levels similar to European countries, whereas that of Oaxaca

Oaxaca

Oaxaca , , officially Estado Libre y Soberano de Oaxaca is one of the 31 states which, along with the Federal District, comprise the 32 federative entities of Mexico. It is divided into 571 municipalities; of which 418 are governed by the system of customs and traditions...

and Chiapas

Chiapas

Chiapas officially Estado Libre y Soberano de Chiapas is one of the 31 states that, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 118 municipalities and its capital city is Tuxtla Gutierrez. Other important cites in Chiapas include San Cristóbal de las...

is similar to that of Syria or Egypt. At the municipal level, disparities are even greater: San Pedro Garza García

San Pedro Garza García

San Pedro Garza García is a city-municipality of the Mexican state of Nuevo León and is part of Monterrey's Metropolitan Area, based on the suburban North American model...

in Nuevo León has an HDI similar to that of Germany or New Zealand, whereas, Metlatonoc in Guerrero

Guerrero

Guerrero officially Estado Libre y Soberano de Guerrero is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 81 municipalities and its capital city is Chilpancingo....

, would have an HDI similar to that of Malawi. The majority of the federal entities with high development (superior to 0.80) are located in the northern region (with the exception of Colima

Colima

Colima is one of the 31 states which, with the Federal District, make up the 32 Federal Entities of Mexico. It shares its name with its capital and main city, Colima....

, Jalisco, Aguascalientes

Aguascalientes

Aguascalientes is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 11 municipalities and its capital city is Aguascalientes....

, the Federal District, Querétaro

Querétaro

Querétaro officially Estado Libre y Soberano de Querétaro de Arteaga is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided into 18 municipalities and its capital city is Santiago de Querétaro....

, as well as the southeastern states of Quintana Roo

Quintana Roo

Quintana Roo officially Estado Libre y Soberano de Quintana Roo is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 10 municipalities and its capital city is Chetumal....

and Campeche

Campeche

). The less developed states (with medium development in terms of HDI, superior to 0.70) are located at the southern Pacific coast (with the exception of Veracruz

Veracruz

Veracruz, formally Veracruz de Ignacio de la Llave officially Estado Libre y Soberano de Veracruz de Ignacio de la Llave , is one of the 31 states that, along with the Federal District, comprise the 32 federative entities of Mexico. It is divided in 212 municipalities and its capital city is...

).

In terms of share in GDP per sector (in 2004), the largest contributors in agriculture are Jalisco (9.7%), Sinaloa

Sinaloa

Sinaloa officially Estado Libre y Soberano de Sinaloa is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 18 municipalities and its capital city is Culiacán Rosales....

(7.7%) and Veracruz (7.6%); the greatest contributors in industrial production are the Federal District (15.8%), State of México (11.8%) and Nuevo León (7.9%); the greatest contributors in the service sector are also the Federal District (25.3%), State of México (8.9%) and Nuevo León (7.5%).

Since the 1980s, the economy has slowly become less centralized; the annual rate of GDP growth of the Federal District from 2003–2004 was the smallest of all federal entities at a mere 0.23%, with drastic drops in the agriculture and industrial sectors. Nonetheless, it still accounts for 21.8% of the nation's GDP. The states with the highest GDP growth rates are Quintana Roo (9.04%), Baja California

Baja California

Baja California officially Estado Libre y Soberano de Baja California is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is both the northernmost and westernmost state of Mexico. Before becoming a state in 1953, the area was known as the North...

(8.89%), and San Luis Potosí

San Luis Potosí

San Luis Potosí officially Estado Libre y Soberano de San Luis Potosí is one of the 31 states which, with the Federal District, comprise the 32 Federal Entities of Mexico. It is divided in 58 municipalities and its capital city is San Luis Potosí....

(8.18%). In 2000, the federal entities with the highest GDP per capita in Mexico were the Federal District (US $17,696), Campeche (US $13,153) and Nuevo León (US $13,033); the states with the lowest GDP per capita were Chiapas (US $3,302), Oaxaca (US $3,489) and Guerrero (US $4,112).

Components of the economy

Gross Domestic Product (GDP) in purchasing power parity

Purchasing power parity

(PPP) in 2006 was estimated at US $1.134 trillion, and GDP per capita in PPP at US $10,600. The service sector is the largest component of GDP at 70.5%, followed by the industrial sector at 25.7% (2006 est.). Agriculture represents only 3.9% of GDP (2006 est.). Mexican labor force is estimated at 38 million of which 18% is occupied in agriculture, 24% in the industry sector and 58% in the service sector (2003 est.).

History

Food and agriculture

}
}}
|-
! style="background:#e9e9e9;" | Product
! style="background:#e9e9e9;" | Quantity (Tm)
! style="background:#e9e9e9;" | World Rank¹
|- style="background:#f0f0f0;"
||Avocados
| style="text-align:right;"| 1,040,390
| style="text-align:right;"| 1
|-
|Onions and chayote
|align=right|1,130,660
|align=right|1
|- style="background:#f0f0f0;"
||Limes and lemons
| style="text-align:right;"|1,824,890
| style="text-align:right;"|1
|-
|Sunflower seed
|align=right|212,765
|align=right|1
|- style="background:#f0f0f0;"
|| Dry fruits
| style="text-align:right;"| 95,150
| style="text-align:right;"| 2
|-
| Papaya
| align=right|955,694
| align=right|2
|- style="background:#f0f0f0;"
|| Chillies and peppers
| style="text-align:right;"| 1,853,610
| style="text-align:right;"|2
|-
| Whole beans
| align=right| 93 000
| align=right|3
|- style="background:#f0f0f0;"
|| Oranges
| style="text-align:right;"|3,969,810
| style="text-align:right;"|3
|-
| Anise, badian, fennel
| align=right|32 500
| align=right|3
|- style="background:#f0f0f0;"
|| Chicken meat
| style="text-align:right;"|2,245,000
| style="text-align:right;"|3
|-
| Asparagus
| align=right|67,247
| align=right|4
|- style="background:#f0f0f0;"
|| Mangoes
| style="text-align:right;"|1.503.010
| style="text-align:right;"|4
|-
| Corn
| align=right|20,000,000
| align=right|4
|-
| colspan="3" style="background:#e9e9e9; text-align:center;"|¹Source:FAO
|}

Industrial production
Main industries	Aircraft, automobile industry, petrochemicals, cement and construction, textiles, food and beverages, mining, consumer durables, tourism
Industrial growth rate	3.6% (2006)
Labor force	24% of total labor force
GDP of sector	25.7% of total GDP

History

Macroeconomic, financial and welfare indicators

Main indicators

Poverty

Remittances

Regional economies

Components of the economy

History

Importance of agriculture to Mexico's economy

Crops

Potatoes

Sugar cane

Industry

Electronics

Televisions

Mobile Phones

Computers

OEM and ODM manufacturing

Engineering and Design

Joint Production

Domestic Industry

Energy and mineral resources

Services

Tourism

Banking system

Securities market

Government policies and the Central Bank

Currency policy

Monetary system

Trade

Free trade agreements

NAFTA

Mexican trade facilitation and competitiveness

External links