the mexican economy: ¡sí se puede!
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The Mexican Economy: ¡Sí se puede!. Jorge G. Gonzalez Trinity University. Recent Economic and Political Events. Economic growth in the U.S. Government gridlock Presidential campaigns Mexico – U.S. relationship. Immigration Debate. Pros: Shortage of labor in U.S. & surplus in Mexico - PowerPoint PPT PresentationTRANSCRIPT
The Mexican Economy:
¡Sí se puede!
Jorge G. Gonzalez
Trinity University
Recent Economic and Recent Economic and Political EventsPolitical Events
Economic growth in the U.S.Economic growth in the U.S. Government gridlockGovernment gridlock Presidential campaignsPresidential campaigns Mexico – U.S. relationshipMexico – U.S. relationship
Immigration DebateImmigration Debate
Pros:Pros: Shortage of labor in U.S. & surplus in Shortage of labor in U.S. & surplus in
MexicoMexico U.S. benefits from their laborU.S. benefits from their labor Mexico benefits from remittancesMexico benefits from remittances
Cons:Cons: Effects on low-skilled nativesEffects on low-skilled natives Effects on local budgetsEffects on local budgets
Vital SignsVital Signs
Is the link alive?Is the link alive?
50
60
70
80
90
100
110
120
U.S. Mexico
Industrial Production IndexIndustrial Production Index(January 2000 = 100)(January 2000 = 100)
Source: Banco de México and FED www.banxico.org.mx; www.federalreserve.gov
Vital SignsVital Signs
Is the link alive?Is the link alive? GDP growthGDP growth
Real GDPReal GDP% yearly change% yearly change
Source: INEGI www.inegi.gob.mx
-10
-5
0
5
10
1994 1996 1998 2000 2002 2004
Vital SignsVital Signs
Is the link alive?Is the link alive? GDP growthGDP growth Foreign direct investmentForeign direct investment
Foreign Direct InvestmentForeign Direct InvestmentBillions of DollarsBillions of Dollars
Source: Banco de México www.banxico.org.mx
2.64.8 4.4 4.4
11.09.5 9.2
12.812.4
13.5
17.2
27.5
17.3
12.9
18.217.8
0.0
5.0
10.0
15.0
20.0
25.0
30.0
1990 1992 1994 1996 1998 2000 2002 2004
Debt Market Foreign Debt Market Foreign InvestmentInvestmentBillions of DollarsBillions of Dollars
Source: Banco de México www.banxico.org.mx
0.90.6
0.1 -0.9 0.0
0.9
0.1
0.9
5.2
3.3
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1996 1998 2000 2002 2004
Stock Market Foreign Stock Market Foreign InvestmentInvestmentBillions of DollarsBillions of Dollars
Source: Banco de México www.banxico.org.mx
2.8 3.2
-0.7
3.8
0.40.2
-0.1-0.1
-2.5
3.4
-4.0
-2.0
0.0
2.0
4.0
6.0
1996 1998 2000 2002 2004
Vital SignsVital Signs
Is the link alive?Is the link alive? GDP growthGDP growth Foreign direct investmentForeign direct investment Super Peso and foreign sectorSuper Peso and foreign sector
Exchange RateExchange RatePesos per U.S. DollarPesos per U.S. Dollar
Source: Banco de México www.banxico.org.mx
4
5
6
7
8
9
10
11
12
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Exchange RateExchange RatePesos per U.S. DollarPesos per U.S. Dollar
Source: Banco de México www.banxico.org.mx
4
5
6
7
8
9
10
11
12
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
1995 19971999 2001
20032005
Inflation Differential vs. Inflation Differential vs. Exchange RateExchange Rate
Inflation
Exchange Rate
317
219
Source: Banco de México www.banxico.org.mx
10
20
30
40
50
60
70
94 - I 95 - I 96 - I 97 - I 98 - I 99 - I 00 - I 01 - I 02 - I 03 - I 04 - I 05 - I
Merchandise TradeMerchandise TradeBillions of DollarsBillions of Dollars
Source: Banco de México www.banxico.org.mx
Imports
Exports
Family RemittancesFamily RemittancesBillions of DollarsBillions of Dollars
4.2 4.9 4.7 5.9 6.68.9
9.8
13.416.6
20.0
0.0
5.0
10.0
15.0
20.0
1996 1998 2000 2002 2004
Source: Banco de México www.banxico.org.mx
Vital SignsVital Signs
Is the link alive?Is the link alive? GDP growthGDP growth Foreign direct investmentForeign direct investment Super Peso and foreign sectorSuper Peso and foreign sector Federal government balanceFederal government balance
0.2 0.0 0.0
-0.7
-1.1 -1.0 -1.0-0.7
-1.1
-0.6-0.2 -0.1
-2.0
-1.0
0.0
1.0
1994 1996 1998 2000 2002 2004
Government BalanceGovernment BalanceBalance / GDPBalance / GDP
Source: SHCP www.shcp.gob.mx
Vital SignsVital Signs
Is the link alive?Is the link alive? GDP growthGDP growth Foreign direct investmentForeign direct investment Super Peso and foreign sectorSuper Peso and foreign sector Federal government balanceFederal government balance War on inflationWar on inflation
InflationInflation
Source: Banco de México www.banxico.org.mx
7.05
51.97
27.70
15.7218.61
12.328.96
4.40 5.703.98 5.19
3.33
0
10
20
30
40
50
60
1994 1996 1998 2000 2002 2004
Vital SignsVital Signs
Is the link alive?Is the link alive? GDP growthGDP growth Foreign direct InvestmentForeign direct Investment Super Peso and foreign sectorSuper Peso and foreign sector Federal government balanceFederal government balance War on InflationWar on Inflation
Political EnvironmentPolitical Environment
Felipe Calderón
Roberto Madrazo
Andrés López Obrador
Political EnvironmentPolitical Environment
Source: El Norte, April 25, 2006 www.elnorte.com
President Fox’s SexenioPresident Fox’s Sexenio
Separation of PowersSeparation of Powers Economic Stability Economic Stability Poverty ReductionPoverty Reduction Freedom of the PressFreedom of the Press No Major Economic No Major Economic
ReformsReforms
Fiscal System, Energy Sector, and Labor Fiscal System, Energy Sector, and Labor LawsLaws
Domestic Antitrust and CompetitionDomestic Antitrust and Competition War on PovertyWar on Poverty Rule of LawRule of Law North American Union?North American Union?
Economic Reform: ¿Sí se Economic Reform: ¿Sí se puede? puede?
