Mexico Economy—overview: Mexico has a free market economy with a mixture of modern and outmoded industry and agriculture increasingly dominated by the private sector. The number of state-owned enterprises in Mexico has fallen from more than 1 000 in 1982 to fewer than 200 in 1998. The ZEDILLO administration is privatizing and expanding competition in sea ports railroads telecommunications electricity natural gas distribution and airports. The Mexican economy is in its third year of recovery from the recession of 1995 which was touched off by a financial crisis. After declining 6.2% in 1995 real GDP grew 5.1% in 1996 and 7.3% in 1997 and is expected to rise by 5% in 1998. A strong export sector helped to cushion the economy's decline in 1995 and led the recovery in 1996 and 1997. Private consumption spending in 1998 probably will rise by at least 4% on the strength of increased employment and rising real wages and the troubled banking sector is likely to increase lending for the first time in three years. Despite the spillover from the Asian crisis the medium-term outlook for Mexico remains positive with government and private sector economists projecting average annual growth of 4% to 5% through the year 2000. Mexico still needs to overcome many structural problems as it strives to modernize its economy and raise living standards. Income distribution is very unequal with the top 20% of income earners accounting for 55% of income. The inefficient agricultural sector employs 20% to 25% of the labor force but produces only 8% of GDP. Trade with the United States and Canada has nearly doubled since NAFTA was implemented in 1994. Mexico is pursuing additional trade agreements with most countries in Latin America and with the European Union to lessen its dependence on the United States which accounts for 80% of Mexico's total trade. GDP: purchasing power parity—$694.3 billion (1997 est.) GDP—real growth rate: 7.3% (1997 est.) GDP—per capita: purchasing power parity—$7 700 (1997 est.) GDP—composition by sector: agriculture: 8% industry: 33% services: 59% (1997 est.) Inflation rate—consumer price index: 15.7% (1997 est.) Labor force: total: 36.6 million (1996) by occupation: services 28.8% agriculture forestry hunting and fishing 21.8% commerce 17.1% manufacturing 16.1% construction 5.2% public administration and national defense 4.4% transportation and communications 4.1% Unemployment rate: 3.7% (1997 est.) urban; plus considerable underemployment Budget: revenues: $92 billion expenditures: $94 billion including capital expenditures of $NA (1997 est.) Industries: food and beverages tobacco chemicals iron and steel petroleum mining textiles clothing motor vehicles consumer durables tourism Industrial production growth rate: 9.3% (1997 est.) Electricity—capacity: 35.466 million kW (1995) Electricity—production: 145.199 billion kWh (1995) Electricity—consumption per capita: 1 533 kWh (1995) Agriculture—products: corn wheat soybeans rice beans cotton coffee fruit tomatoes; beef poultry dairy products; wood products Exports: total value: $110.4 billion (f.o.b. 1997 est.) includes in-bond industries commodities: crude oil oil products coffee silver engines motor vehicles cotton consumer electronics partners: US 85% Canada 2.1% Japan 1% Spain 1% Chile 1% Brazil 1% (1997 est.) Imports: total value: $109.8 billion (f.o.b. 1997 est.) includes in-bond industries commodities: metal-working machines steel mill products agricultural machinery electrical equipment car parts for assembly repair parts for motor vehicles aircraft and aircraft parts partners: US 74.8% Japan 4.1% Germany 3.5% Canada 1.8% South Korea 1.4% Italy 1.2% France 1.1% (1997 est.) Debt—external: $162 billion (1997 est.) Economic aid: recipient: ODA $85 million (1993) Currency: 1 New Mexican peso (Mex$) = 100 centavos Exchange rates: market rate of Mexican pesos (Mex$) per US$1—8.1798 (January 1998) 7.9141 (1997) 7.5994(1996) 6.4194 (1995) 3.3751 (1994) 3.1156 (1993) Fiscal year: calendar year
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