The Economy of Mexico

Mexico has the 12th biggest economy in the world by the end of 2006. During that year, its GDP is estimated at $1.15 trillion with a per capita income of $12.78, the highest in Latin America. Mexico is already considered as a middle-income country whose economy is highly export-driven and has a free market.
Major economic components of Mexico include services, agriculture, production, and energy and mineral resources. The service segment is Mexico’s biggest contributor with a 70.5% of its GDP coming from tourism, financial and banking services, hotel operations, health, telecommunications, and transportation. As a percentage of GDP, agriculture only accounts 3.9% as of 2006. Oil export is Mexico’s principal source of foreign income. While remittances from Mexican citizens, mostly coming from those working in the US, takes the second place with an estimated value of US$20 billion every year. Various macroeconomic programs during the last 2 governments have improved in reducing the poverty rate of Mexico. The annual growth of GDP was 5.1% during 1995-2002, inflation rate hit an all time record low of 3.3% in 2005, and foreign debt was less than 20% of the country’s GDP.
In 1992, Mexico signed the North American Free Trade Agreement (NAFTA). NAFTA gave the opportunities for Canadian and United States companies to open offices or branches in Mexico, which bring on jobs to the country. Majority of trades in Mexico are under free trade agreements of which NAFTA continues to contribute extensively. The United States and Canada remain to be Mexico’s biggest trading partners. Approximately 90% of Mexico’s export products are transported to these 2 countries. It is predicted that by 2050, Mexico will have one of the largest economies together with China, USA, India, Japan and Brazil.Education