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Mexico Country Analysis

Autor:   •  March 29, 2011  •  Case Study  •  1,545 Words (7 Pages)  •  1,655 Views

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Mexico Country Analysis Mexico has a capitalist economy with a fast growing service and industrial base. Mexico has a free market economy in the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Per capita income is roughly one-third that of the US; income distribution remains highly unequal. Trade with the US and Canada has nearly tripled since the implementation of NAFTA in 1994. In the last nearly one decade, especially following the signing of NAFTA in 1994, the Mexican economy has achieved unprecedented growth, stability and consolidation on nearly all fronts. The current estimated GDP of more than US $ 600 billion is the largest in Latin America. With a population of 100 million, a per capita income of a little over US $ 6000, coupled with other factors, the Mexican market has become one of the most attractive in the world from the viewpoint of trade and investments. Mexico has free trade agreements with over 50 countries including, Guatemala, Honduras, El Salvador, the European Free Trade Area, and Japan, putting more than 90% of trade under free trade agreements. Modernizing labor laws and fostering private investment in the energy sector also compliments Mexico's attractiveness.

Economy

The Mexican currency has moderate potential to increase in value per the purchase price parity and interest rate parity analysis. The economic environment is moderate for long term economic growth. S.W.O.T. weaknesses are significantly greater than S.W.O.T. (Analysis of Strengths, Weaknesses, Opportunities, and Threats) strengths, whereas, opportunities are greater than threats. The US and Canada are the top trading partners, while the leading exports are in the industrial and agricultural sectors. Mexico produces the following commodities: crude oil, corn, propane, silver, pork, oats, and chicken for export. Transportation infrastructure and crime are the leading SWOT weaknesses, while tourism and education are the leading SWOT opportunities. Mexico's Trading Strategy is an undervalued currency; low investment flow potential and unfavorable business environment lead to neutral or negative outlook for Mexican investments.

The following is a country analysis breakdown of Mexico statistically:

Labor force:

47 million (as of 2009)

Exports - partners:

US 80.5%, Canada 3.6%, Germany 1.4% (as of 2009)

Exports - commodities:

Manufactured goods, oil and oil

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