Jorge G. Gonzalez Against All Against All Odds Odds The Mexican Economy The Mexican Economy
Jorge G. Gonzalez Against All Odds The Mexican Economy.
Dec 22, 2015
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Jorge G. Gonzalez
Against All OddsAgainst All OddsThe Mexican EconomyThe Mexican Economy
Recent Economic and Recent Economic and Political EventsPolitical Events
► U.S. recession and recoveryU.S. recession and recovery Exports to the U.S.Exports to the U.S. Remittances from the U.S.Remittances from the U.S. Fluctuations in oil pricesFluctuations in oil prices Decline in direct foreign investmentDecline in direct foreign investment
Recent Economic and Recent Economic and Political EventsPolitical Events
►U.S. recession and recoveryU.S. recession and recovery►Export-led recessionExport-led recession►H1N1 Flu VirusH1N1 Flu Virus►Political gridlockPolitical gridlock►Battle against organized crimeBattle against organized crime
Recent Economic and Recent Economic and Political EventsPolitical Events
►U.S. recession and recoveryU.S. recession and recovery►Export-led recessionExport-led recession►H1N1 Flu VirusH1N1 Flu Virus►Political gridlockPolitical gridlock►Battle against organized crimeBattle against organized crime►Mexico – U.S. relationshipMexico – U.S. relationship
The Mexican EconomyThe Mexican Economy
►North American business cycleNorth American business cycle
50
60
70
80
90
100
110
120
U.S. Mexico U.S. 2003 Mexico 2003
Industrial Production Industrial Production IndexIndex
(January 2000 = 100, January 2003 = (January 2000 = 100, January 2003 = 100)100)
Source: Banco de México and FED www.banxico.org.mx; www.federalreserve.gov
The Mexican EconomyThe Mexican Economy
►North American business cycleNorth American business cycle►GDP growthGDP growth
Real GDPReal GDP% yearly change (2003 Prices)% yearly change (2003 Prices)
Source: INEGI www.inegi.gob.mx
-10.0
-5.0
0.0
5.0
10.0
1994 1996 1998 2000 2002 2004 2006 2008
The Mexican EconomyThe Mexican Economy
►North American business cycleNorth American business cycle►GDP growthGDP growth►Foreign direct investmentForeign direct investment
Foreign Direct Foreign Direct InvestmentInvestmentBillions of DollarsBillions of Dollars
Source: Banco de México www.banxico.org.mx
2.64.8 4.4 4.4
11.09.5 9.2
12.8 12.713.9
18.1
29.8
23.6
16.6
23.822.3
19.8
27.3
23.2
14.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
DEM +
NAFTA
Source: Banco de México www.banxico.org.mx
0.7 0.50.0 -0.9 -0.1
0.9
0.0
0.7
5.0
2.8 2.5
7.8
6.0
3.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1996 1998 2000 2002 2004 2006 2008
Debt Market Foreign Debt Market Foreign InvestmentInvestmentBillions of DollarsBillions of Dollars
Stock Market Foreign Stock Market Foreign InvestmentInvestmentBillions of DollarsBillions of Dollars
Source: Banco de México www.banxico.org.mx
2.83.2
-0.7
3.8
0.40.2 -0.1 -0.1
-2.5
3.42.8
-0.5
-3.5
4.2
-4.0-3.0-2.0-1.00.01.02.03.04.05.06.0
1996 1998 2000 2002 2004 2006 2008
The Mexican EconomyThe Mexican Economy
►North American business cycleNorth American business cycle►GDP growthGDP growth►Foreign direct investmentForeign direct investment►Mexican Peso and foreign sectorMexican Peso and foreign sector
Exchange RateExchange RatePesos per U.S. DollarPesos per U.S. Dollar
Source: Banco de México www.banxico.org.mx
4
6
8
10
12
14
16
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Exchange RateExchange RatePesos per U.S. DollarPesos per U.S. Dollar
Source: Banco de México www.banxico.org.mx
4
6
8
10
12
14
16
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
1995 1997 1999 2001 2003 2005 2007 2009
Inflation Differential vs. Inflation Differential vs. Exchange RateExchange Rate
Inflation
Exchange Rate
344
266
Source: Banco de México www.banxico.org.mx
10
20
30
40
50
60
70
80
90
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Merchandise TradeMerchandise TradeBillions of DollarsBillions of Dollars
Source: Banco de México www.banxico.org.mx
Imports
Exports
Family RemittancesFamily RemittancesBillions of DollarsBillions of Dollars
4.2 4.9 5.6 5.9 6.68.9
9.8
15.018.3
21.7
25.6 26.125.1
21.2
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1996 1998 2000 2002 2004 2006 2008
Source: Banco de México www.banxico.org.mx
Family RemittancesFamily RemittancesBillions of DollarsBillions of Dollars
4.2 4.9 5.6 5.9 6.68.9
9.8
15.018.3
21.7
25.6 26.125.1
21.2
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1996 1998 2000 2002 2004 2006 2008
Source: Banco de México www.banxico.org.mx
The Mexican EconomyThe Mexican Economy
►North American business cycleNorth American business cycle►GDP growthGDP growth►Foreign direct investmentForeign direct investment►Mexican Peso and foreign sectorMexican Peso and foreign sector►Fiscal policyFiscal policy
0.2 0.0 0.0
-0.7
-1.1-1.0 -1.0
-0.7
-1.1
-0.5-0.2 -0.1
0.1 0.0
-0.1
-2.2
-3.0
-2.0
-1.0
0.0
1.0
1994 1996 1998 2000 2002 2004 2006 2008
Government BalanceGovernment BalanceBalance / GDPBalance / GDP
Source: SHCP www.shcp.gob.mx
The Mexican EconomyThe Mexican Economy
►North American business cycleNorth American business cycle►GDP growthGDP growth►Foreign direct investmentForeign direct investment►Mexican Peso and foreign sectorMexican Peso and foreign sector►Fiscal policyFiscal policy►Price stabilityPrice stability
InflationInflation
Source: Banco de México www.banxico.org.mx
7.05
51.97
27.70
15.7218.61
12.328.96
4.405.70
3.98 5.193.334.05 3.76
6.533.57
0
10
20
30
40
50
60
1994 1996 1998 2000 2002 2004 2006 2008
The Mexican EconomyThe Mexican Economy
►North American business cycleNorth American business cycle►GDP growthGDP growth►Foreign direct investmentForeign direct investment►Mexican Peso and foreign sectorMexican Peso and foreign sector►Fiscal policyFiscal policy►Price stabilityPrice stability
►Rule of lawRule of law►Mexico – U.S. relationshipMexico – U.S. relationship►War on povertyWar on poverty►Energy sector and labor lawsEnergy sector and labor laws►Domestic antitrust and competitionDomestic antitrust and competition►Political LandscapePolitical Landscape
PRI: Enrique Peña NietoPRI: Enrique Peña Nieto PRD: Marcelo EbrardPRD: Marcelo Ebrard PAN: ?PAN: ?
Current Challenges Current Challenges
www.trinity.edu/jgonzal1
Against All OddsAgainst All OddsThe Mexican EconomyThe Mexican Economy
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