Mexico has benefited from its close ties to the United States for decades. While trade relations between the two countries remain strong, Mexico now stands to bear a disproportionate share of any U.S. economic downturn — a situation exacerbated by the fact that its own oil resources are drying up. Our Globalist Factsheet takes a closer look at Mexico.

Where does Mexico stand among the world’s largest economies?

With its population of 109 million people, Mexico accounts for about 1.6% of the world population — and about the same percentage of the global economy.

(International Herald Tribune)

How wealthy are Mexico’s people?

Mexico’s per capita GDP stands at 39% of the average for industrialized nations. The comparable numbers are 144% for the United States, 104% for Japan, 74% for Korea — and just 27% for Turkey.

(OECD)

Are incomes in Mexico evenly distributed?

Mexico has some of the worst poverty and inequality indicators by Latin American standards — with the richest 10% of citizens controlling 43% of the country's wealth and some 40% of the population living below the poverty line (as of 2006).

(New York Times)

What level of economic growth does Mexico require?

Mexico's economy will need to grow 6% per year on a sustainable basis to absorb new entrants to the labor market — a performance level it has not reached since 2000.

(Financial Times)

What is notable about the Mexican government’s finances?

Mexico's total tax revenues amounted to only 11.4% of GDP. This is less than one-third the average for the OECD countries (36%) — and below the average of 13.7% for Latin America (as of 2004).

(The Economist)

Why is that?

Food, medicines, agriculture, fisheries and land transport are either exempt from value-added tax or zero-rated. These exemptions cost up to 2% of GDP in tax lost revenues — and also make tax evasion easier.

(The Economist)

What’s another reason?

Mexico's informal economy still accounts for slightly more than half of total employment in the country.

(World Bank)

Who’s paying taxes, then?

The Mexican government depends on Pemex, the state oil and gas monopoly, to finance its budget. In 2006, sales reached $97 billion. Of that, $79 billion was appropriated by Mexico's government, accounting for 40% of the federal budget.

(International Herald Tribune)

When did Mexico nationalize oil production?

Back in 1938, Mexico was the first major oil producer to kick out foreign companies, a key event that is still described in Mexican school textbooks.

(Wall Street Journal)

Is Mexico a large oil producer?

Although Mexico has less than 1% of the world's proven oil reserves, it is the sixth-largest oil producer.

(The Economist)

Who’s buying?

Mexico is the third-largest supplier of oil to the United States (as of 2008) — after Canada and Saudi Arabia.

(Wall Street Journal)

But will the oil flow forever?

At current rates of production, Mexico’s oil reserves are expected to run out in around ten years.

(BP Statistical Review of World Energy)

Are there already signs of a slowdown?

Production at Mexico's Cantarell oil complex, Mexico’s biggest, dropped by a third, to slightly more than one million barrels a day in 2008 — compared with 1.6 million barrels a day in 2007.

(Mexico’s Energy Ministry)

Just how dependent is Mexico on its neighbor to the north?

In 2007, 30% of Mexico's GDP directly depended on the United States — through exports, tourism and remittance flows.

(Financial Times)

What about remittances in particular?

Remittances in Mexico are the second-largest source of foreign income, after oil, and ahead of tourism — accounting for 3% of Mexico's GDP.

(The Economist)

What are the numbers?

Remittances to Mexico reached $23 billion in 2006, up from $4 billion in 1995. While 80-90% of the remittances go to subsidizing consumption, at least 10% goes into capital investment such as housing and roads.

(Inter-American Development Bank)

How many Mexican workers are working in the United States?

In 2006, almost 30% of Mexico's labor force was working in the United States.

(International Economy)

What is the state of Mexico’s export economy?

Mexico's exports have risen, reaching $272 billion in 2007 — 50% higher than four years earlier. They are expected to reach $288.1 billion in 2008 and $310.7 billion in 2009.

(Thomson Datastream)

Is it easy to start a business in Mexico?

According to the World Bank's Doing Business 2007 report, of the 175 countries it surveyed, Mexico ranked 108th in terms of the difficulties faced by businesses in hiring, employing and firing workers.

(Johns Hopkins University)

What is Mexico’s demographic profile?

Mexicans in the 0-14 age bracket make up about 31% of the population — but are projected to decline to 16% of the population by 2050. The 15-64 age bracket is expected to peak at 68% of the population in 2025 — and then decline to 62% by 2050.

(United Nations)

What about seniors?

The 65 and older age bracket makes up 6% of the population as of 2007 — but is expected to grow to 21% of the population by 2050.

(United Nations)

What explains the aging of Mexico’s population?

From 1970 to 2006, Mexico's fertility rate declined from 6.5 children per woman to 2.2 — only slightly above the replacement rate of 2.1. (United Nations) What health threat faces Mexico’s citizens? Mexico is the nation with the second-most obese population among the 30 countries of the OECD — following only the United States.

(The Economist)

Where is Mexico’s economic activity centered?

As of 2006, Mexico City accounted for 26.7% of Mexico's GDP.

(OECD)

How quickly has the city’s population grown?

Back in 1950, only 2.9 million people lived in Mexico City — making it only the world’s 17th-most populous city. As of 2005, with its population of 19 million people, Mexico City is the second-most populous urban area in the world.

(United Nations Population Division)

What is the outlook?

By 2015, Mexico City’s population is expected to reach 21.6 million — smaller only than Tokyo and Mumbai.

(United Nations Population Division)

And finally, how rich is Mexico’s richest person?

The richest person in Mexico is Carlos Slim, with a net worth calculated at $30 billion — the equivalent of 3.7% of Mexico's GDP.

(The Economist)

Last updated August 12, 2009