MexicoSarah Lopez, Zack Holden, Brenna Gomez, and Ben Pompilus

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

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.

Surrounding Countries Freedom Scores

● US- 76.2, 12th freest

● Guatemala- 60.4, 87th freest

● Belize- 56.8, 117th freest

Exports

● USA (70%), Canada (5.4%), and Spain (2.1%)

● 15th largest

● Top 5 exports

● Furskins and artificial furs

Imports

● USA (47%) China (17%) , and Japan (4.9%)

● Top 5 imports

● Collector items, art, antiques

Surrounding Countries Exports + Imports

Guatemala● Export- TCT 11.4B● Import- TCT 16.8BUnited States● Export- TCT 1.23T● Import- TCT 1.8TBelize ● Export- TCT 490M● Import- TCT 1.25B

Mexico ● Export- TCT 349B● Import- TCT 295B

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

Mexican Presidency

● Enrique Peña Nieto

● Occupied positions in government

● President from 2012-Present Day

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.

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

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%

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.