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Mexico is the ninth-largest export economy in the world and the twenty-first most complex economy according to the Economic Complexity Index (ECI). Also, as the second-largest economy in Latin America, Mexico is in expansion. The Mexican economy expanded at a modest pace of 2% annually during the first half of 2018. Its potential growth is impacted by progress around the North American Free Trade Agreement (NAFTA) renegotiations and the past Presidential elections.
Mexico’s gross domestic product (GDP) expanded 0.1% on quarter in the three months to June 2019. It recovered from a 0.2% contraction in the previous period, and beat market expectations of a 0.1% fall. A preliminary estimate showed services activity advanced slightly while the industry did not contribute to the growth, and agriculture output contracted sharply. GDP growth rate in Mexico averaged 0.59% from 1993 until 2019, reaching an all-time high of 3.2 % in the third quarter of 2009 and a record low of -5.70% in the first quarter of 1995.
International Trade – Import and Export figures
Exports from Mexico increased by 1.2 % year-on-year to US$37.949 billion in June 2019. Non-oil exports advanced 2.8%, boosted by higher sales of manufacturing (2.9%), in particular machinery and equipment for industries (13%), food, alcoholic & beverages (11.7%), automotive products (4.4%) and steel products (1.1%).
Also, sales of agricultural products rose 4.9%, namely frozen shrimp (137.8%), melon, watermelon & papaya (73%), grapes & raisins (72.7%) and fresh vegetables (24.7%). In contrast, sales of mining dropped by 7.3%.
Oil & Gas
Oil exports declined by 20.4%. The country exported 0.995 million barrels of crude oil per day, lower than its 1.110 million barrels a year ago while the price was US$58.33 per barrel, US$6.26 below the price in June 2018. Non-oil exports to the United States of America went up 4.1%, of which auto sales (6.5%) and others (2.8%). Sales to the rest of the world fell by 2.5%. The main destination of these exports is the United States at about 73% of exports.
Imports to Mexico decreased 7.8% year-on-year to US$35.388 billion in June 2019, mainly due to lower purchases of consumption goods (7.1%), of which were non-oil (-5.7%) and gasoline, butane & propane gas (-9.7%); intermediate (-6.2%), as both oil (-23.5%) and non-oil (-4.2%); and capital goods (-21.2%). Imports in Mexico averaged US$14.608 billion from 1980 until 2019, reaching an all-time high of US$44.290 billion in October of 2018 and a record low of US$647.02 million in January of 1983. Most of the imported products come from the North American continent (54%) and Asia (29%), with China and the United States as the main partners.
The Mexican market is still growing each year, with a perfect strategic location for doing business with both its northern and southern partners. There are plenty of opportunities for business to reach other regional markets from Mexico, as well as enjoy a plentiful local market for their commercial activities.
Leading sectors for Doing Business in Mexico
Oil and gas, automotive, financial services, communications, retail commerce and tourism sectors are some of Mexico’s biggest industries. They all play a significant part in the economy of the country. As per the International Monetary Fund, Mexico has the world’s eleventh largest GDP by purchasing power parity and sixteenth largest in nominal terms.