According to cheeroutdoor, Mexico has a free market economy that is heavily dependent on international trade. It is the 12th largest economy in the world, and the 15th most populous country with a population of more than 123 million people. The country’s main economic activities are manufacturing, retail, services, and tourism. Mexico’s economy is characterized by its openness to foreign trade and investment, reliance on export revenues from oil, strong macroeconomic stability and low inflation rate.
In terms of manufacturing, Mexico has become an important player in global production chains as it provides access to North American markets for companies from all over the world. The automotive industry is one of the most important sectors in Mexico’s manufacturing sector with many major auto manufacturers having assembly plants in the country. The electronics industry also plays a significant role in Mexico’s economy as it produces components used by companies around the world.
Retail is another important sector of Mexico’s economy with many small businesses providing goods and services to local populations throughout the country. In addition to traditional retail stores, there are also many large department stores such as Wal-Mart that have opened up throughout Mexico in recent years.
The service sector is also an important part of Mexico’s economy with many people employed in industries such as finance, insurance, banking, telecommunications and IT services. This sector has experienced strong growth due to increased competition between domestic firms and foreign companies looking to take advantage of low labor costs in the region.
Tourism is another key driver of economic growth for Mexico with millions of visitors each year visiting its beaches and resorts along both coasts of the country as well as its cities like Cancun or Acapulco which have become popular tourist destinations for people from around the world looking for a unique experience or adventure vacation spot. Tourism also accounts for about 8% of GDP making it one of the largest contributors to economic growth in recent years due to increased number of visitors from both domestic and international markets coming into Mexico each year looking for a unique experience or adventure vacation spot which provides employment opportunities for locals while generating revenue for local businesses offering goods or services related to tourism industry.
In conclusion, we can see that Mexico has a dynamic free market economy that is heavily reliant on international trade due to its openness towards foreign investments which has helped create jobs while boosting economic growth throughout different sectors such as manufacturing, retailing services and tourism which all contribute significantly towards overall GDP making it one of top 15 largest economies in world today with potential further development opportunities available within certain industries like renewable energy initiatives if investors are made aware about potential benefits available within this small Latin American nation situated strategically near United States border along Pacific coast line bordering Guatemala Belize countries respectively.
Since the 1950s, the economy has become less dependent on agriculture and service industries have become increasingly important. In 2001, 56% were employed here. Mexico had one of the fastest growing economies in the world in the 1970s. Since the mid-1980s, falling oil prices and lower oil production have led the country into an economic crisis. resulted in uncontrolled inflation, a very high foreign debt and high unemployment. In 2002, there was a slight growth in the economy after a decline in 2001. In 2002, total foreign debt amounted to USD 154 billion. A restructuring of the economy from the latter part of the 1980s led to economic recovery, as did the cooperation with Canada and the United States from 1993 through the North American Free Trade Agreement (NAFTA). However, a sharp devaluation of the peso in December 1994 led to a new economic crisis, the worst since the 1930s, with inflation, rising interest rates and rising unemployment. A $ 50 billion crisis package was offered by the US and the International Monetary Fund (IMF), which along with a tight austerity policy appears to have stabilized the economy.
Gross domestic product (GDP) grew annually on average by 7.9% in the period 1965–73, 4.2% in the period 1973–85, and 3.0% in the period 1991–2001; Per capita GDP in 2004 was estimated at $ 9600. See also the History section.
- Paulsourcing: Top 10 tips for doing business in Mexico, covering country profile and market entry requirement.
Agriculture is still an important sector of the country’s economy, although industrialization has made great strides. Agriculture, along with forestry and fisheries, contributed 6.8% of gross domestic product (GDP) in 1992 and employed 27% of the working population (1994). In 2001, this figure had dropped to 17.5%, but still 46 million is dependent on agriculture. About half of the land can be used for agricultural purposes. Most of this is used as pasture. Only a small part is cultivated land, of which again only a small part is under artificial irrigation.
Agriculture includes both haciendas, ‘big estates’, which, before the revolution in 1910, occupied 40% of the land, and ranchos,’small farms’. A land reform, begun in 1922, has distributed expropriated land from the large estates to a kind of village collective, ejidos, which in 1990 included approx. 60% of agricultural land. Pursuant to a law of 1992, ejidos shall be wound up. Despite an official minimum size of use of 10 ha, 60% of farms are under 5 ha.
Grain occupies approx. 70% of the cultivated area, of which corn is 43%, dry 10% and wheat 5%. Corn, which is tortillated, ‘pancakes’, is the most important food, along with beans and vegetables. In Tierra caliente, ‘the hot land’, tropical and subtropical plants such as coffee, sugar cane, as well as cotton, cocoa, coconuts, bananas, oranges and rice are grown. Large quantities of sisal are grown in Yucatán. In Tierra templada, mainly on the central plateau, cereals, coffee, sugar cane, tobacco, cotton, etc. are cultivated. Agriculture in Tierra templada, ‘the temperate land’, is mainly focused on domestic consumption, in Tierra caliente, where foreign companies have large properties, on exports. Mexico’s agricultural production has failed to keep pace with population growth, and the country must import both grain and other staple foods.
About 25% of Mexico’s area is wooded. Large pine forests cover the slopes of Tierra Free; moreover, it grows precious spruce, oak, cedar, mahogany and rosewood. The forestry is essentially concentrated to the Sierra Madre Occidental and to the western part of the state of Chihuahua as well as to the tropical rainforests of the states of Campeche and Quintana Roo. The annual harvest is just over 20 million m 3, of which approx. 2/3 are used for fuel. At Yucatán, chewing gum raw material is extracted.
Extensive fishing is conducted on both coasts, especially in the Gulf of California. The total catch volume in 2002 was 1.5 million tonnes, with sardines and tuna as the most important fish species (by weight). Large quantities of shellfish are also taken, including shrimp exported to the United States.
The Mexican Central Plateau is one of the world’s most mineral-rich areas, and the country has supplied precious metals since before Columbus. Mexico produces a large part of the world’s most important minerals. The mining industry was previously almost entirely on foreign hands, but Mexican-owned enterprises now account for most of the mineral production. Mexico is the world’s largest producer of silver, and a significant producer of antimony, lead, graphite, copper, mercury and zinc. Furthermore, the gold, uranium, manganese, arsenic, molybdenum, coal, iron ore and sulfur.
Oil and natural gas have been mined for a number of years, and Mexico was the world’s leading petroleum producer as early as the 1920s. The major oil and natural gas deposits along the Gulf Coast were nationalized as early as 1938, and were an important factor in the country’s industrial growth. In the 1970s, large, new deposits of oil were found both on land (the states of Tabasco and Chiapas) and in the Gulf of Campeche, and in 1986 Mexico’s oil reserves were estimated at 7.7 billion tonnes (8% of the world’s known reserves). In the 1980s, the country was among the world’s largest oil producers and exporters, with a production of 166 million tonnes of crude oil in 2003 and 44.9 billion m 3 of natural gas. The state oil company Petróleos Mexicanos (PEMEX) has a monopoly on the extraction of oil and natural gas, and is the country’s largest employer.
Although coal, oil and natural gas account for most of Mexico’s power generation, hydropower has become increasingly important. Among the largest hydropower plants are the plants at Río Papaloapán (which supplies power to Veracruz), the Rio Grande’s lower run (power to Monterrey) and the Miguel Alemán plant (power to the capital). The country’s first nuclear power plant, Laguna Verde (1300 MW), was commissioned in 1987.
Abbreviated as MEX by abbreviationfinder.org, Mexico has a relatively versatile industry that employs approx. 27% of the working population (2001) and account for almost 30% of the gross domestic product. The industry has a center of gravity in and around the capital Ciudad de México, and to a lesser extent in the Monterrey and Guadalajara regions. The most important industrial sectors have long been the textile, iron, steel, cement and wood processing and chemical industries. The textile industry has long traditions, and many local craft centers still make clothing based on Native American patterns. The cotton industry developed in line with the cotton cultivation in the north, with Ciudad de México, Puebla and Torreón as the most important centers. The foremost steel centers are Monterrey, Monclova and in Las Truchas on the Pacific coast, near the mouth of the Río Balsas. A characteristic feature of industrial development after the 1970s is the construction of a large petrochemical industry, including in Minatitlán and Poza Rica, and of factories for the production of cars and car parts, radio and television sets and other consumables.
Tourism has increased significantly since the 1980s and is a very important source of income for the country. In 2004, approx. 20 million tourists to Mexico, the vast majority from the United States and Canada. In the same year, the revenue from tourist traffic was approx. $ 10 billion. The foremost tourist destinations are the capital Ciudad de México, seaside resorts such as Acapulco on the Pacific Coast and Cancún on the Yucatán Peninsula, and the numerous monuments of the Aztecs and Mayan Indians.
Note: the capital city of Mexico is Mexico City with a population of 21 million (with suburbs, estimate 2013). Other major cities include Guadalajara with a population of 1.6 million , Puebla with a population of 1.5 million, Ciudad Juárez with a population of 1.3 million , Tijuana with a population of 1.3 million (2010 census).
In the 1970s Mexico experienced a growing deficit on its foreign trade balance, which was to some extent offset by the large currency revenues from tourist traffic. At the same time, large borrowing led to considerable foreign debt. From 1982, the foreign economy for a long time made a profit, despite falling oil revenues, mainly due to. a sharp reduction in the country’s imports. In 2001, the export and import value was USD 149 196 million and USD 157 856 million respectively. The export value was distributed by 12.5% on crude oil, 50% on machinery and transport equipment, 6.5% on agricultural products and 4.5% on chemicals. Imports include machinery and transport equipment, food and chemical products. The dominant trading partner is the United States with 88% of exports, including most of the country’s oil exports, and 63% of imports.
- COUNTRYAAH: Find major trading partners of Mexico, including major exports and major imports with latest trade value and market share as well as growth rate.
Transport and Communications
Mexico has a relatively well-developed transport network. Road transport is the most important, and accounts for 70% of all passenger transport and 60% of freight transport. The road network comprises a total of approx. 253,000 km of public roads, of which less than half are paved. All the main roads run together in the capital Ciudad de México. Mexico has a well-developed bus network that includes both luxury buses and the simpler guajoloteros (“turkey expresses”). The former state-owned railway network (20,500 km) was privatized in the latter half of the 1990s. An exception is the famous railway through Barranca del Copre, the Copper Canyon) from Chihuahua to Los Mochis on the Pacific Coast. The railway network covers the central plateau, the lowlands on the Gulf coast and the northern parts of the country. Aviation, both domestic and international, is well developed. In addition to the capital México, which has an important international airport, there are over 80 other international and national airports. The main ports are Veracruz, Tampico, Coatzacoalcos and Tuxpán on the Gulf of Mexico, while the Pacific ports Salina Cruz, Guaymas, Manzanillo, Lázaro Cárdenas, Acapulco and Mazatlán are less important.