Mexico

Politics:

• Analysis

  Mexico politics: Quick View - Government presents new security strategy

  Event

  The newly inaugurated president, Enrique Peña Nieto of the Partido Revolucionario Institucional, presented his government's security strategy on December 17th. This includes the creation of a European-style gendarmerie.

  Analysis

  Mr Peña Nieto's security strategy is based on six main proposals centred around improving planning, prevention, protection of human rights, state-level co-ordination, evaluation and the creation of a national gendarmerie. This new force would be modelled on those of various European countries and would fulfil both police and military roles. Its initial strength would be 10,000, with an eventual fourfold expansion expected, although the timetables for its creation and expansion have not yet been set. The gendarmerie would have a national presence, although its main focus would be on those states and municipalities hardest-hit by drug-related violence.

  The new security strategy follows campaign pledges to shift the focus of the war against drug cartels from the military (which since late 2006 has been taking the lead role) to the police. The results of the previous government's strategy have been mixed; the new attorney-general, Jesus Murillo Karam, recently acknowledged that approximately 70,000 people have been killed since 2006. Despite the killing or capture of many of Mexico's top drug lords, Mr Karam said that there are 60-80 active cartels, many of which have splintered off from the larger ones, including the Sinaloa cartel and Los Zetas, which currently dominate the drugs trade-the consolidation within these two cartels is seen as a reason why crime levels have fallen in 2012 for the first time since the war began.

  In the longer run, the new strategy, if implemented fully and professionally, could improve the quality of the police, which has been damaged by low pay and inadequate training, as well as by poor co-ordination between local, state and federal forces. However, Mexico's history regarding new police institutions is far from impressive-the Agencia Federal de Investigaciones (AFI), which was modelled on the US Federal Bureau of Investigation (FBI), was widely praised upon its creation a decade ago, but was eventually disbanded as a result of widespread corruption among its ranks.

  December 19, 2012

• Background

  Mexico: Key figures

  Enrique Peña Nieto

  After winning the July 1st election, Mr Peña Nieto will be sworn in as president in December for a six-year term. His fairly positive track-record as governor of the Estado de México (2005-11), the country's most populous and industrialised state, his telegenic appeal and extensive support from the media have proven formidable electoral assets in the run-up to the election. Mr Peña Nieto has campaigned as the new face of the Partido Revolucionario Institucional (PRI) on a platform of structural reforms and opening up the energy sector to private investment. However, he will face a challenging political environment plagued by lingering doubts about the legitimacy of his victory, and continuing social protests from student and other social group movements for more transparency and better job opportunities.

  Felipe Calderón

  The outgoing president has expressed willingness to start working with the new PRI government to make the transition smooth and, in his sixth and last report on the state of the nation, delivered in September, has drawn a roadmap of unfinished issues for the new government (including oil exploration, creating jobs and continuing the war on drugs). The two bills sent to Congress for priority discussion (focusing on labour reform and fiscal responsibility) also highlighted common ground with PRI agenda. On the Partido Acción Nacional (PAN) front, Mr Calderón has lately been engaged in a tussle with the party leader, Gustavo Madero, to determine control of the party and its strategy ahead of the local and municipal elections scheduled for 2013.

  Luis Videgaray Caso

  Mr Videgaray Caso has been a close collaborator of Mr Peña Nieto since he served as secretary of finance, planning and administration from 2005 to 2009 under the president-elect's administration of Estado de México. As general co-ordinator of Mr Peña Nieto's election campaign, Mr Videgaray Caso is widely credited with shaping the new president's winning strategy, and is regarded as one of the rising stars within the PRI. He has been appointed by Mr Peña Nieto to co-ordinate reform initiatives and, in his likely role of head of the President's Office, will continue to play a key role in defining the government agenda and pushing reforms forward, especially that of energy. His sound credentials as a competent administrator and politician will also help to reinforce the government's legitimacy.

  Manlio Fabio Beltrones

  The PRI's leader in the Senate (the upper house of Congress) under the previous administration, a former governor of Sonora and an experienced politician, Mr Beltrones is the key power broker in the PRI and has played a central role in negotiating with the PAN government on structural reform (notably securing the PRI's support for pension and fiscal reforms in 2007). He cleared the way for Mr Peña Nieto's nomination by dropping out of the race in November 2011. As the PRI's leader in the Chamber of Deputies (the lower house), he will be instrumental, together with the PRI's leader in the Senate, Emilio Gamboa Patrón, in negotiating with the opposition and securing support for the government's reform agenda. He is widely deemed to be a member of the PRI's old guard.

  Marcelo Ebrard

  Mindful of Mr López Obrador's continuing influence within the Partido de la Revolución Democrática (PRD), the outgoing mayor of Mexico City (the capital) has been slow to emerge from his shadow. Mr Ebrard's stint as mayor of the capital and his pragmatism in working with the PAN government on a range of issues, including urban crime and the 2009 swine flu epidemic, have burnished his credentials as a competent administrator and moderate figure. Mr Ebrard may represent the ideal candidate for the PRD for of the 2018 election, appealing to centrist voters. However, the elections are a long way away and he is likely to lose visibility unless he finds a strong platform from which to launch his candidature.

  Andrés Manuel López Obrador

  Mr López Obrador remains one of the most popular and, at the same time, divisive politicians in Mexico. After challenging and refusing to accept the results of the 2006 election he had lost by a narrow margin, he was nominated once again as the PRD's candidate for the 2011 election, in which he came second behind Mr Peña Nieto. Although he has made efforts to rebrand himself as a moderate, business-friendly politician during the latest campaign and has appealed the 2012 election result through legal means, he has recently stated that he will not accept the electoral tribunal's decision and will continue to be associated with social protest, cutting a polarising figure within the PRD. He will continue to have a presence in the Mexican political scene in the next six years and may run again in the 2018 election, possibly with a smaller leftist party.

  Elba Esther Gordillo

  The leader of the Sindicato Nacional de Trabajadores de la Educación (SNTE, the main teachers' union and the largest union in Latin America), the powerful "maestra" Elba Esther Gordillo is likely to play a crucial tie-breaking role in the new legislature given that her party, the Partido Nueva Alianza (PANAL), controls the ten seats which the PRI lacks to reach the absolute majority needed to pass most of the reforms on its agenda. Mr Peña Nieto has openly welcomed an alliance with Ms Gordillo during the electoral campaign but such an alliance, if it were to materialise, would be likely to be at the cost of precluding substantial progress on education reform, and possibly also that of labour.

  September 20, 2012

• Structure

  Mexico: Political structure

  Official name

  United Mexican States

  Political divisions

  31 states and the Federal District (Mexico City); states are divided into municipalities

  Form of government

  Presidential, with a constitutionally strong Congress

  The executive

  The president is elected for a non-renewable six-year term and appoints the cabinet

  National legislature

  Bicameral Congress: 128-member Senate, elected for a six-year term, with 64 seats elected on a first-past-the-post basis, 32 using the first minority principle and 32 by proportional representation; 500-member Chamber of Deputies (the lower house), elected for a three-year term, with 300 seats elected on a first-past-the-post basis and 200 by proportional representation

  Regional governments

  State governors are elected for six-year terms; each state has a local legislature and has the right to levy state-wide taxes; municipal presidents are elected for three-year terms

  Legal system

  There are 68 district courts and a series of appellate courts with a Supreme Court; federal legal system, with states enjoying significant autonomy

  National elections

  Next elections July 2015 (congressional), July 2018 (presidential and congressional)

  National government

  The president, Enrique Peña Nieto of the Partido Revolucionario Institucional (PRI), heads a minority government

  Main political organisations

  Government: Partido Revolucionario Institucional (PRI)

  Opposition: Partido Acción Nacional (PAN); Partido de la Revolución Democrática (PRD); Partido Verde Ecologista de México (PVEM); Convergencia; Partido del Trabajo (PT); Partido Nueva Alianza (Panal)

  President: Enrique Peña Nieto

  Cabinet members

  Agrarian reform: Jorge Carlos Ramírez Marín

  Agriculture: Enrique Martínez y Martínez

  Attorney-general: Jesús Murillo Karam

  Communications & transport: Gerado Ruiz Esparza

  Economy: Ildefonso Guajardo Villarreal

  Energy: Pedro Joaquín Coldwell

  Environment & natural resources: Juan José Guerra Abud

  Finance & public credit: Luis Videgaray Caso

  Foreign relations: José Antonio Meade Kuribreña

  Health Mercedes: Juan López

  Interior: Miguel Osorio Chong

  Labour & social welfare: Alfonso Navarrete Prida

  National defence: Salvador Cienfuegos Zepeda

  Naval: Vidal Soberón Salas

  Public education: Emilio Chuayffet Chemor

  Public security: Manuel Mondragón y Kalb

  Social development: Rosario Robles Berlanga

  Tourism: Claudia Ruiz Massieu

  Central bank governor

  Agustín Carstens

  December 04, 2012

• Outlook

  Mexico: Key developments

  Outlook for 2013-17

  • Enrique Peña Nieto of the PRI was sworn in as president on December 1st; progress on structural reforms will be constrained by the need to gain support from the opposition as well as the PRI's links to entrenched interest groups.
  • Despite its strong legislative position, the PRI will require the support of the Panal to get a majority, and that of the PAN for constitutional reforms. Common ground with the PAN bodes well for energy reform.
  • Following estimated growth of 4% in 2012 (revised up from 3.9%), we expect GDP to remain broadly stable at around 3.7% throughout the forecast period.
  • Policymakers will continue to run a fiscal deficit, averaging 0.7% in 2013-17. The incoming PRI government will be less hawkish than its predecessor, given the need for additional public spending to finance its policy proposals.
  • As a result of a still uncertain global outlook, we assume that the central bank will hold rates at 4.5% until end-2013 and will maintain a dovish stance, despite a recent spike in inflation already starting to subside.
  • The peso will remain weak relative to other emerging-market currencies, boosting export competitiveness. An ample stock of international reserves will help to smooth out potential volatility.
  • The current-account deficit will widen to 1.8% (revised down from 2.6%) in 2017 as import demand grows. The likely opening of the energy sector to private investment will lead to a rise in FDI after weak inflows in 2009-12.

  Review

  • Mr Peña Nieto was inaugurated as president on December 1st amid a backdrop of rioting by anti-PRI protesters in Mexico City.
  • After two months of fiery debate, Mexico's Congress approved a controversial labour reform on November 13th, the first set of meaningful changes to labour market laws in the past four decades.
  • On November 14th Mr Peña Nieto presented to Congress a bill to create a Comisión Nacional Anti-Corrupción (CNA, Anti-Corruption Commission), but criticisms have arisen over its independence and effectiveness.
  • Following the publication of the first Módulo de Bienestar Autorreportado (BIARE, a survey on subjective wellbeing), Mexico has joined a select group of countries to develop metrics for assessing levels of subjective wellbeing.
  • Real GDP grew by 3.3% year on year in the third quarter of 2012 (0.45% quarter on quarter), the lowest level seen so far in the year.
  • Mexico's current-account balance swung into a deficit equivalent to 0.2% of estimated GDP in the third quarter, erasing the surplus of the first half.

  December 04, 2012

Economy:

• Background

  Mexico: Country fact sheet

  Fact sheet

  Annual data	2011a	Historical averages (%)	2007-11
  Population (m)	113.8	Population growth	1.2
  GDP (US$ bn; market exchange rate)	1,154.0	Real GDP growth	1.5
  GDP (US$ bn; purchasing power parity)	1,948.5b	Real domestic demand growth	1.4
  GDP per head (US$; market exchange rate)	10,138	Inflation	4.4
  GDP per head (US$; purchasing power parity)	17,118b	Current-account balance (% of GDP)	-0.9
  Exchange rate (av) Ps:US$	12.4	FDI inflows (% of GDP)	2.2
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Background: Mexico was governed by the Partido Revolucionario Institucional (PRI) between 1929 and 2000. Once strongly nationalist and interventionist, the leaders of PRI governments in the 1990s embraced free-market policies and economic liberalisation. The presidential victory in 2000 of Vicente Fox, of the centre-right Partido Acción Nacional (PAN), was a milestone in the transition to democratic pluralism, but political effectiveness was hindered by a divided legislature, making political and economic reforms slow to progress. Sluggish growth and soaring violent crime contributed to Mr Fox's successor, Felipe Calderón (PAN), losing to Enrique Peña Nieto of the PRI in the July 1st 2012 presidential election.

  Political structure: The political system is presidential, bicameral and federal (31 states). Mr Peña Nieto has taken office on December 1st for a six-year term. Under the transition to democratic pluralism, the centre of political power has shifted away from the executive towards the legislature and local governments. State governors wield substantial influence over federal deputies from their districts. A ban on re-election for executive posts and party control of legislators elected by proportional representation limit politicians' accountability and impair policy continuity and implementation.

  Policy issues: Conservative fiscal and monetary policies contain public indebtedness and underpin macroeconomic stability. However, the weakness of the non-oil fiscal revenue base and the shallowness of credit markets leave the authorities with few tools at their disposal to boost demand. There has been limited progress on the legislative agenda, with watered-down fiscal and hydrocarbons reforms passed in 2007-08. Prospects for competitiveness enhancing reforms appear more positive with the new PRI administration, given its larger congressional presence and the likelihood that the PAN will support parts of its agenda although the PRI's association with strong interest groups remains a concern. Persistent constraints on growth include high-cost labour and energy inputs, excessive dependence on the US export market and a deficient education system.

  Taxation: The corporate tax rate stands at 30%. Alternatively, companies can pay a flat-rate tax (IETU) of 17.5%. The top rate of personal income tax is 30%. Tax on royalties is between 15% and 34%. Depreciation allowances range from 5% to 25%, but can be up to 50% on pollution-control equipment. The value-added tax (VAT) rate is 16% (11% in the border area); food products and medicines are exempt from VAT.

  Foreign trade: Import duties range from zero to 35%, with the trade-weighted average tariff at 2.9%. VAT is levied at 15% on all imports, except those to the border region, where a 10% rate applies. In 2011 exports totalled US$349.4bn and imports US$350.8bn, producing a trade deficit of US$1.5bn. The current-account deficit was 1% of GDP, up from 0.4% of GDP in 2010.

  Major exports 2011	% of total	Major imports 2011	% of total
  Manufactures	79.7	Intermediate goods	75.3
  Oil	16.1	Capital goods	10.0
  Agricultural products	3.0	Consumer goods	14.8
  Leading markets 2011	% of total	Leading suppliers 2011	% of total
  US	78.5	US	49.7
  Canada	3.1	China	14.9
  China	1.7	Japan	4.7
  Colombia	1.6	South Korea	3.9

  Download the numbers in Excel

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  December 05, 2012

• Structure

  Mexico: Economic structure

  Data and charts: Annual trends charts

  
  

  

  December 04, 2012

• Outlook

  Mexico: Country outlook

  Mexico: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: Enrique Peña Nieto of the Partido Revolucionario Institucional (PRI) was officially inaugurated as president on December 1st, marking the return to power of a party which had ruled Mexico for 70 years until its electoral defeat in 2000. Taking advantage of the fact that the new PRI-dominated legislature was sworn in on September 1st, Mr Peña Nieto and his party have since been negotiating with various opposition parties in a bid to reach a consensus on structural reforms that it hopes to push through. The outgoing president, Felipe Calderón of the centre-right Partido Acción Nacional (PAN), surprisingly kick-started the reform agenda for the next government in early September with an ambitious labour-market reform proposal which was approved after two months of negotiation, although the PRI succeeded in stripping it of those provisions which would have affected union interests. Subsequently, Mr Peña Nieto presented to Congress a plan to create an anti-corruption commission to dissipate doubts about his party's poor track record in this regard (in recent years, numerous PRI state governors have been accused of corruption) as well as accusations of fraud in the July 1st elections, but also in response to a string of bribery and money-laundering claims against a pair of multinational firms.

  ELECTION WATCH: The next presidential election will be held in 2018, by which time the three main parties are likely to have largely changed their leaderships and put forward a new generation of potential presidential hopefuls. The PAN faces an uphill struggle, given the lack of any particularly charismatic leader. In contrast, the Partido de la Revolución Democrática (PRD) may look to Marcelo Ebrard, the popular and progressive former mayor of the capital, Mexico City, as the ideal candidate to attract the centrist vote, but may face a challenge from his successor, Miguel Mancera, who was sworn in on December 1st. Andrés Manuel López Obrador, the divisive PRD candidate in the last two presidential elections, has since left the party and is in the process of forming his own from his grassroots movement, the Movimiento de Renovación Nacional (Morena). The 2015 congressional election could be decisive in determining the pace of progress of Mr Peña Nieto's reform agenda in the second half of his term.

  INTERNATIONAL RELATIONS: The relationship with the US, Mexico's dominant trade and investment partner, and host to around 13m people of Mexican origin, will remain Mr Peña Nieto's overriding foreign policy focus, but it will be complemented by greater attention to Latin America and Asia than the previous two administrations showed. Mr Peña Nieto's anti-drugs strategy is unlikely to differ greatly from that of his predecessor; close co-operation on drug policy with the US is expected in the short and medium term, notwithstanding US fiscal constraints and Mexico's refusal to have US troops based on its soil. The outlook for a comprehensive immigration reform bill in the US that could help to assimilate undocumented Mexican workers has become more positive after the victory of Barack Obama in November for a second term, with the overwhelming support of the Latino vote (over 70% of which went to Mr Obama). Mexico boasts one of the world's largest networks of trade agreements (comprising links with over 40 countries in three continents), but exports to the US still accounted for almost 80% of total exports in 2011. Efforts to diversify economic linkages will be made through the Trans-Pacific Partnership Agreement (TPP), negotiations towards which the country officially joined in September, and the Alianza del Pacífico (Pacific alliance) pact with Andean economies, as well as on a bilateral basis with some important trading partners.

  POLICY TRENDS: The new government's reform agenda will take its final shape in the coming months, with PRI-PAN negotiations in areas such as energy reform already under way. However, there is no guarantee that the government will be able to break the congressional deadlock, or that it will push sufficiently comprehensive reforms through Congress, given the strong pressure exerted by entrenched interests and the PRI's support base. Persistent problems such as limited credit availability for small and medium-sized enterprises, and low rates of tax collection, will limit investment and long-term growth, as will poor educational performance. On the monetary front, the Banco de México (Banxico, the central bank) has room to cut interest rates and will maintain a dovish stance on inflation to support growth. Despite global risks and close synchronisation with the US business cycle, the government can count on a US$73bn flexible credit line with the IMF (available until January 2013 and in the process of being renewed), while a record accumulation of reserves over the past two years will provide greater ammunition to control peso volatility.

  ECONOMIC GROWTH: The Mexican economy grew by 3.9% in 2011, and growth has averaged 4.2% year on year during the first three quarters of 2012. The Economist Intelligence Unit estimates a growth rate of 4% for 2012 (up slightly from 3.9% in our previous report owing to an upward revision of first-half growth), on the assumption that economic activity picks up modestly from the third quarter (when it grew by just 3.3% year on year) as suggested by relatively positive consumer and business confidence and a slight improvement in the outlook for the US, Mexico's main trading partner. Growth is expected to average 3.7% per year in 2013-17, in line with Mexico's potential rate, but the outlook could improve if the new government succeeds in implementing a reform agenda tackling structural bottlenecks. Mexico's close links to the US business cycle will pose significant downside risks if the US economy falters, including through the spillover of a deepening of the euro zone crisis, although this is not our baseline scenario. Assuming that US growth does not slow dramatically, however, Mexico will continue to benefit from the dynamism of its export-based manufacturing sector, which in the past two years has profited from a fairly weak peso and also from rising labour costs in China, thereby helping the sector recoup some of its lost competitiveness. As a result, export volume growth should accelerate in 2013-17, as will real imports, leaving net trade as a negative contributor to GDP.

  INFLATION: Inflationary pressures, caused by an outbreak of avian flu among fowl stocks in mid-year and compounded by a drought (in both Mexico and the US) that has raised the costs of other key agricultural commodities, have started to subside. Consumer price inflation fell to 4.4% in mid-November (from a high of 4.8% in September) and is likely to move back into Banxico's target ceiling of 4% by early 2013. In the longer term, only modest increases in real wages and ample spare capacity will prevent domestic demand from exerting significant pressure on prices. We retain our baseline assumption that inflation will stabilise within the 2-4% target range throughout the forecast period, in the absence of any unexpected price shocks. Nevertheless, inflation will remain much higher than the OECD average of 2.2%.

  EXCHANGE RATES: Mexico's large external financing requirement and exposure to the US economy make the peso especially vulnerable to shifts in market sentiment, exacerbated by frequent flare-ups of turmoil in the euro zone. The introduction of a third round of quantitative easing (QE3) in September in the US gave a noticeable boost to the peso, but this has worn off over the course of November as the peso once again breached the Ps13:US$1 mark. Into the medium term, we expect the peso to remain weaker than its regional counterparts owing to some unique factors such as lower interest rates, which have attracted fewer capital inflows, and greater spare capacity in the economy since the 2009 recession. Banxico will remain committed to controlling currency volatility, aided by solid international reserves (US$158.4bn, as of September). From an estimated Ps13.1:US$1 at end-2012, the peso will reach Ps12.9:US$1 by end-2017, which in real terms is still below its 2006 level.

  EXTERNAL SECTOR: After registering a mild surplus in the first half of the year, we estimate that Mexico's current-account deficit will reach 0.7% of GDP in 2012, before widening to 1.8% of GDP in 2017 as the merchandise trade deficit increases. This is a substantial downward revision from our previous forecast of a 2.6% deficit by end-2017 as we now expect a more favourable outlook for Mexico's exports in the medium term, as well as higher current account income flows from direct investment abroad. The services deficit will remain relatively stable as a share of GDP over the forecast period, notwithstanding some improvement in tourism revenue, whereas the income deficit will decline as a share of GDP, owing to higher returns on international reserves and lower interest payments on foreign debt. Profit repatriations from foreign companies operating in Mexico will also be increasingly (albeit only partly) offset by those of Mexican companies operating abroad. The current transfers surplus--which is dominated by workers' remittances from Mexicans overseas--has been falling since 2007 as a share of GDP and, at an annual 2.3% average in the forecast period, will remain significantly lower than the 2006 peak of 2.7% of GDP. Our forecasts assume that the current-account deficit will remain manageable and largely financed by foreign direct investment (FDI) inflows and, especially, portfolio flows, which have surged in recent months (a record of US$57.5bn was received in the first three quarters of 2012), supported by interest rate differentials with developed economies. FDI inflows have fallen from highs of around US$30bn per year at the beginning of the previous decade, but even at their current level (US$13.5bn in the first half of 2012) are supportive of Mexico's external financing requirements, even as FDI outflows (US$16.3bn so far in 2012) have reached record levels. FDI inflows should get a significant boost from the likely opening up of the energy sector, but will remain capped by strong entry barriers in certain profitable non-tradeable sectors.

  December 01, 2012

• Forecast

  Mexico: Country forecast summary

  Country forecast overview: Highlights

  • Enrique Peña Nieto of the Partido Revolucionario Institucional (PRI) has been sworn in for a six-year term, on December 1st 2012. His economic agenda will focus on key structural reforms in areas such as energy, fiscal policy and social services (a labour reform proposed by the previous administration was watered down in Congress where it was approved in November). Significant changes in the security strategy are unlikely, as is any major progress in reining in violence, although the PRI has set itself ambitious targets in this respect.
  • The PRI's lack of a majority in Congress will force it to negotiate with the opposition, particularly with the Partido Acción Nacional (PAN), whose votes it would need to pass any constitutional amendments. Nevertheless, the party's strong ties to certain interest groups will make the PRI unwilling to challenge the political status quo significantly.
  • Even with a conservative fiscal and monetary stance, the policy mix will remain sub-optimal, owing to extremely low non-oil tax collection. The fiscal deficit is expected to narrow throughout the forecast period, but the incoming government will be less fiscally hawkish than its predecessor prior to the 2009 crisis, and will maintain high spending to support its agenda.
  • With domestic demand relatively stable, inflationary pressure under check despite the weak peso, and global financial markets under persistent strain, the Economist Intelligence Unit expects the Banco de México (Banxico, the central bank) to maintain its current dovish stance and hold rates at 4.5% in 2012-13, before beginning a tightening cycle spanning 2014-15.
  • GDP growth is forecast to remain strong, at 4% in 2012 and 3.7% in 2013, aided by a fairly weak peso which will continue to boost export competitiveness. Growth will remain below that of some regional peers, reflecting weaker trade ties with Asia, and Mexico's high vulnerability to the US business cycle.
  • In spite of some success in diversifying export markets, Mexico's economic fortunes will remain closely tied to those of the US. Import growth will outpace export earnings, resulting in a widening current-account deficit (forecast to reach 1.8% of GDP by 2017). We expect that additional financing needs will be met mainly by foreign direct investment (FDI).
  • A large internal market, stable policies, privileged access to the US market and an extensive network of free-trade agreements (FTAs) will ensure steady growth of FDI, but levels will remain below potential owing to poor domestic market competition and weak credit provision.

  

  December 05, 2012

View detailed map

Country Briefing

Land area

1,964,375 sq km

Population

112.5m in 2010, according to estimates from the US Census Bureau

Main towns

Population (m), 2010 (INEGI data)

Mexico City (capital): 15.2

Tijuana: 1.6

Guadalajara: 1.5

Puebla: 1.5

Climate

Tropical in the south, temperate in the highlands, dry in the north

Weather in Mexico City (altitude 2,309 metres)

Hottest month, May, 12-26°C (average daily minimum and maximum); coldest month, January, 6-19°C; driest month, February, 5 mm average rainfall; wettest month, July, 170 mm average rainfall

Languages

Spanish is the official language. Over 60 indigenous languages are also spoken, mainly Náhuatl (1.2m speakers), Maya (714,000), Mixtec (387,000) and Zapotec (403,000)

Measures

Metric system

Currency

Peso (Ps). Average exchange rates in 2011: Ps12.42:US$1; Ps17.49:€1

Time

Six hours behind GMT in Mexico City

Public holidays

January 1st; February 4th; March 16th; Maundy Thursday; Good Friday; May 1st and 5th; September 16th; October 12th; November 20th; December 12th (partial) and 25th

March 16, 2012