Independent Mexico enjoyed steady economic growth till the 1970s but in the 1980s, a fall in global oil prices precipitated an economic crisis. Mexico is a major producer and exporter of petroleum with one-third of the government's revenue derived from the oil industry. Although the country's petroleum industry survived the crisis and recovered substantially, it was the diversification of the economy mainly in the industrial and services sectors that have aided Mexico's economic growth and recovery during the 1990s. During the same time the government of Mexico also decided to liberalize the erstwhile state-controlled economy in keeping with the increasing trends of Globalization across the world. Up till that time Mexico's economy was largely regulated by the state, which not only owned major economic sectors like mining and power generation but also controlled foreign investment and imports. Therefore measures undertaken by the government as part of its economic liberalization process such as the deregulation of several industries, the promotion of foreign investment, privatization of key sectors, and removal of import restrictions gave a big fillip to Mexico's economic growth in the early 1990s. However recessionary tendencies emerged with the devaluation of the Mexican peso in 1994. The government was forced to adopt several austerity measures including reduced spending to get the economy back on track. However, a fresh recession emerged again in 2001 largely as a result of corresponding downtrends in the American economy. It may be noted that the United States is the main source of foreign investment in Mexico and also provides the biggest market for Mexico's exports. Also remittances from Mexicans working in the United States contribute billions of dollars to the Mexican economy every year.
Services and Manufacturing Industries form the two main sectors of the Mexican economy together accounting for more than four-fifth of the nation's GDP. On the other hand, agriculture, which employs 25% of Mexico's workforce accounts for only a negligible part of its GDP. Mexico's most important produce and its principal export is however oil. But the country has in recent times learnt the hard way from its singular reliance on oil and therefore today another important source of Mexico's exports is that section of the manufacturing industry which produces finished products largely aimed for the US market. The tourism sector especially aided by the presence of popular destinations like Cancun, Acapulco and Mexico City, also continues to remain an important source of employment and a steady foreign exchange earner.
Mexico's principal exports include crude oil, petroleum products, automobiles, consumer electronics, and cash crops like coffee, cotton and sugar. The country's main imports include food grains, steel, chemicals, machinery and electrical equipments, and consumer goods. Mexico is also a founding member of the North American Free Trade Agreement (NAFTA).
| Economy and Business | ||
