Mexico Economic Structure

Mexico is the 12th largest economy in the world, with an estimated GDP (PPP) of US$1.567 trillion in 2010. Throughout history, Mexico has gone through several crisis, but the most notable ones that they suffered greatly is during the 1994 Mexican Peso crisis, and the 2008 global financial crisis.

Mexico is the 12th largest economy in the world, with an estimated GDP (PPP) of US$1.567 trillion in 2010. Throughout history, Mexico has gone through several crisis, but the most notable ones that they suffered greatly is during the 1994 Mexican Peso crisis, and the 2008 global financial crisis.

The Mexican Peso crisis in 1994 was caused by the Mexico’s government decision to devalue the peso. This resulted in a financial crisis that cut the value of peso into half, create high inflation and set forth a severe recession in Mexico. The country is hit with massive lay-offs and loss of foreign investments. GDP (Constant Prices, National Currency) in 1995 contracts by 6.22 percent, the worst decline in the country history. Mexico’s economy recovered with the aid of a US$50 billion bailout from the United States, the IMF and the Bank for International Settlements.

In 2008, the global financial crisis caused severe economic downturn in many countries, with Mexico one of the greatest hit country in Latin America. GDP (Constant Prices, National Currency) contracted by 6.11 percent, the highest contraction since the 1994 Mexican Peso crisis. As the Mexico’s economy is heavily depended on U.S.’s, with 45 percent of Mexico’s foreign investment come from US and 80.5 percent of Mexico’s exports going to US, a fall in US demand for exports results in decreasing exports and rising unemployment in Mexico.

Mexico has signed numerous free trade agreements with more than 40 countries, with the most important FTA is the North American Free Trade Agreement (NAFTA) signed with the U.S. in 1994, that increased significant trade between Mexico and North America countries, the United States and Canada. Mexico is also a member of the World Trade Organization (WTO), G-20, Organization for Economic Cooperation and Development (OECD), Asia Pacific Economic Cooperation (APEC) and the Caribbean Community (CARICOM).

Economic Geography

Mexico has a land area of 1.943 million square kilometers, with 12.66 percent of arable land. With only a small percentage of arable land, Mexico generates significant revenue from the production of crops such as corn, tomatoes, sugar cane, dry beans and avocados, and also the production of beef, poultry, pork and dairy products too.

Mexico is also the world’s 7th largest oil producer in 2009, with 3.001 million barrels produced per day, and they are the 2nd largest oil supplier to US. The country is also rich in natural resources, namely silver, copper, gold, lead, zinc and timber.

Population and Labour Force

Mexico has a population of 108.627 million people as of 2010, with a labor force of 46.99 million people. In 2010, the unemployment rate in Mexico is 5.373 percent.

Mexico’s labour force includes a growing informal sector, which is mostly poor workers, is estimated to make up 28.8 percent of the total labour force. It is observed that there is an increasing trend of growth in the informal sector, even with a decline in unemployment rate. Hence, it is likely that due to the economic crisis in 2008 that more people have moved from the formal to the informal sector.

Mexico also has a net emigration rate at negative 3.24 migrants/1,000 population. The figure reflects the excess number of persons leaving the country. It is estimated that 10 percent of Mexico’s population and 15 percent of its labor force is working in the United States. The high migration rate has also generated a huge inflow of foreign income into Mexico.  In 2009, Mexicans working in the United States have sent a total of US$21.5 billion back home, contributing to 2.4 percent of Mexico’s GDP.

Industry Sector

The industry of Mexico contribute 33.3 percent of the country’s GDP in 2010. One of the most important sector in Mexico’s industry is the automotive industry. Many major car manufactures set up their operations in Mexico, including General Motors, Ford, Chrysler, BMW, Toyota, Honda, Volkswagen and Mercedes Benz. Instead of just functioning as an assembly manufacturer, the automotive industry also functions as a center for research and development for car manufacturing companies.

Electronics is one of the fastest growing sector in Mexico and it is the 2nd largest supplier of electronics to the U.S. after China. In 2007, Mexico is the largest producers of televisions, ahead of China and South Korea, and also became the world’s largest producer of smartphones. In 2009, the Mexican government’s initiative of the PCIEAT, Program for the Electronics and High Technology Industry Competitiveness, aims to make Mexico one of the top 5 global exporter of electronic goods.

In 2010, services in Mexico contributes 62.5 percent to the nation’s overall GDP, with two of its most important sectors coming from the tourism and financial and banking services.

Mexico came in the first in the number of foreign tourists among Latin America countries, second in the Americas, and tenth in the world, with more than 21.45 million visitors in 2009. Tourism in Mexico is supported by 3.254 million jobs in the country, which makes up 7.3 percent of total labour force, and expects to contribute 13 percent to the overall GDP in 2011.

Mexico has a banking system which is financially strong with banks which are well-capitalized. More foreign companies are entering its banking sector with an increasing number of foreign institutions merging with local companies. The acquisitions and mergers of foreign institutions with local companies have helped Mexico recover from its currency crisis in 1994. 



The Mexican Stock Exchange is the second largest stock exchange in Latin America, and forth largest in North America, with a value estimated at US$700 billion. It’s stock exchange is also closely related to the US market. Hence, Mexico’s stock exchange is highly influenced by any movements and developments in the New York and Nasdaq stock exchanges, as well as any interest rate changes in the US.