Economic analysis

ofMexico

By:Shrey Patel

Section B 14bsp0963

Introduction

• Mexico is a federal republic in North America.

• Has estimated population of over 122 million.

• It is bordered on the north by the United States; on thesouth and west by the Pacific Ocean; on the southeastby Guatemala, Belize, and the Caribbean Sea; and on theeast by the Gulf of Mexico.

• Mexico has one of the world's largest economies. It is thetenth largest oil producer in the world, the largest silverproducer in the world.

GDP and GNI

Components of GDP9%

16%

51%

-24%

General government final consumption expenditure (% of GDP) Gross capital formation (% of GDP)

Household final consumption expenditure, etc. (% of GDP) Net export of goods and services(% of GDP)

Inflation level of the economy

0

1

2

3

4

5

6

2004[YR2004]

2005[YR2005]

2006[YR2006]

2007[YR2007]

2008[YR2008]

2009[YR2009]

2010[YR2010]

2011[YR2011]

2012[YR2012]

2013[YR2013]

Inflation, consumer prices (annual %)

Ease of doing business

• Currently ranked 39th in ease of doing business index.

• According to data collected by Doing Business, starting a business there requires 6 procedures, takes 6.3 days.

• Corporate tax is 30%(‘10-’14)

Monetary and Fiscal policy

• It has 3% interest rate.

• With new reformed tax bill proposed in 2014 budget,

policy makers aim to increase tax revenues by 1.4% of

GDP next year and by 2.9% of GDP by the end of 2018.

• The government proposes to increase the fiscal deficit to

1.5% of GDP in 2014

Trends in foreign trade

• Top 5 trading partners are: (1)United States[83.12%]

(2)Canada[2.45%]

(3)Germany[1.76%]

(4)Spain[1.51%]

(5)Brazil[1.14%]

FDI

0

0.5

1

1.5

2

2.5

3

3.5

2005[YR2005]

2006[YR2006]

2007[YR2007]

2008[YR2008]

2009[YR2009]

2010[YR2010]

2011[YR2011]

2012[YR2012]

2013[YR2013]

Foreign direct investment, net inflows (% of GDP)3.222327217

Foreign direct investment, net outflows (% of GDP) ..

40916 US million $ : Net FDI from USA in Q3 2014

Economic relation with India

• India’s trade with Mexico has grown consistently at agood pace over the years.

• A Memorandum of Understanding (MOU) wassigned between India and Mexico on 21stMay, 2007 at New Delhi by Minister ofCommerce and Industry and Minister ofEconomy, Mexico for the establishment of aBilateral High Level Group on Trade ,Investment and Economic Cooperation.

• The functions of the HLG mainly includepromoting bilateral cooperation, maintainingliaison in the economic, commercial, technicaland other related fields and informationexchange.