Mexico - Economy

Economy

Mexico has the 13th largest nominal GDP and the 11th largest by purchasing power parity. GDP annual average growth for the period of 1995–2002 was 5.1%. Foreign debt decreased to less than 20% of GDP. 17% of the population lives below Mexico's own poverty line, ranking behind Kazakhstan, Bulgaria and Thailand. The overall poverty rate however is 44.2%, while a full 70% lack one of the 8 economic indicators used to define poverty by the Mexican government. From the late 1990s, the majority of the population has been part of the growing middle class. But from 2004 to 2008 the portion of the population who received less than half of the median income has risen from 17% to 21% and the absolute levels of poverty have risen considerably from 2006 to 2010, with a rise in persons living in extreme or moderate poverty rising from 35 to 46% (52 million persons). This is also reflected by the fact that infant mortality in Mexico is three times higher than the average among OECD nations, and the literacy levels are in the median range of OECD nations. The Mexican economy is expected to nearly triple by 2020. According to Goldman Sachs, by 2050 Mexico will have the 5th largest economy in the world.

According to the OECD, worldwide Mexico is the country with the second highest degree of economic disparity between the extremely poor and extremely rich, beaten only by Chile – although it has been falling over the last decade. The bottom ten percent in the income hierarchy disposes of 1.36% of the country's resources, whereas the upper ten percent dispose of almost 36%. OECD also notes that Mexico's budgeted expenses for poverty alleviation and social development is only about a third of the OECD average – both in absolute and relative numbers.

According to a 2008 UN report the average income in a typical urbanized area of Mexico was $26,654, while the average income in rural areas just miles away was only $8,403. Daily minimum wages are set annually by law and determined by zone; $57.46 Mexican pesos ($5.75 USD) in Zona A (Baja California, Federal District, State of Mexico, and large cities), $55.84 Mexican pesos ($5.59 USD) in Zone B (Sonora, Nuevo León, Tamaulipas, Veracruz, and Jalisco), and $54.47 Mexican pesos ($5.45 USD) in Zone C (all other states)

In 2006, trade with the United States and Canada accounted for almost 50% of its exports and 45% of its imports. During the first three quarters of 2010, the United States had a $46.0 billion trade deficit with Mexico. In August 2010 Mexico surpassed France to became the 9th largest holder of US debt. The commercial and financial dependence on the US is a cause for concern. The remittances from Mexican citizens working in the United States account for 0.2% of Mexico's GDP which was equal to US$20 billion per year in 2004 and is the tenth largest source of foreign income after oil, industrial exports, manufactured goods, electronics, heavy industry, automobiles, construction, food, banking and financial services. According to Mexico's central bank, remittances in 2008 amounted to $25bn.

Mexico is the largest North American auto-producing nation, recently surpassing Canada and the U.S. The industry produces technologically complex components and engages in some research and development activities. The "Big Three" (General Motors, Ford and Chrysler) have been operating in Mexico since the 1930s, while Volkswagen and Nissan built their plants in the 1960s. In Puebla alone, 70 industrial part-makers cluster around Volkswagen. The relatively small domestic car industry is represented by DINA S.A., which has built buses and trucks for almost half a century, and the new Mastretta company that builds the high performance Mastretta MXT sports car.

Major players in the broadcasting industry are Televisa, the largest Spanish media company in the Spanish-speaking world, and TV Azteca.