<hdr>The World Factbook 1994: Mexico<nl>Economy</hdr><body>
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<item><hi format=bold>Overview:</hi> Mexico's economy, made up predominantly of private manufacturing and services and both large-scale and traditional agriculture, is beginning to rebound from the economic difficulties of the 1980s but still faces key challenges. During the 1980s, the accumulation of large external debts, falling world petroleum prices, rapid population growth, and mounting inflation and unemployment plagued the economy. In recent years, the government has responded by implementing sweeping economic reforms. Strict fiscal and monetary discipline have brought inflation under control, reduced the internal debt, and produced budgetary surpluses in 1992 and 1993. The tight money policies, however, have restricted growth: barely 0.4% in 1993 after a rise of 2.6% in 1992 and 3.6% in 1991. Another aspect of the reform has been the privatization of more than 80% of Mexico's businesses, including all of the commercial banks. Seeking out increased trade and investment opportunities, the government negotiated the North American Free Trade Agreement (NAFTA) with the United States and Canada, which entered into force on 1 January 1994. Within Latin America, Mexico has completed bilateral free trade agreements with Chile and Costa Rica, and is continuing negotiations with Colombia and Venezuela for a trilateral deal in addition to holding trade discussions with various other nations. In January of 1993, Mexico replaced its old peso at the rate of 1,000 old to 1 new peso. Despite its hard-won economic progress and the prospects of long-term gains under NAFTA, Mexico still faces difficult problems, including sluggish growth, unemployment, continuing social inequalities, serious pollution, and the prospect of increased competition with the opening of trade.
<item><hi format=bold>National product:</hi> GDP—purchasing power equivalent—$740 billion (1993 est.)
<item><hi format=bold>National product real growth rate:</hi> 0.4% (1993)
<item><hi format=bold>National product per capita:</hi> $8,200 (1993 est.)
<item>• <hi format=ital>partners:</hi> US 74%, Japan 8%, EC 4% (1992 est.)
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<item><hi format=bold>Imports:</hi> $65.5 billion (f.o.b., 1993 est.), includes in-bond industries
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<item>• <hi format=ital>commodities:</hi> metal-working machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft, and aircraft parts
<item>• <hi format=ital>partners:</hi> US 74%, Japan, 11%, EC 6% (1992)
<item>• <hi format=ital>consumption per capita:</hi> 1,300 kWh (1992)
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<item><hi format=bold>Industries:</hi> food and beverages, tobacco, chemicals, iron and steel, petroleum, mining, textiles, clothing, motor vehicles, consumer durables, tourism
<item><hi format=bold>Agriculture:</hi> accounts for 9% of GDP and over 25% of work force; large number of small farms at subsistence level; major food crops—corn, wheat, rice, beans; cash crops—cotton, coffee, fruit, tomatoes
<item><hi format=bold>Illicit drugs:</hi> illicit cultivation of opium poppy and cannabis continues in spite of active government eradication program; major supplier to the US market; continues as the primary transshipment country for US-bound cocaine and marijuana from South America
<item><hi format=bold>Economic aid:</hi>
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<item>• <hi format=ital>recipient:</hi> US commitments, including Ex-Im (FY70-89), $3.1 billion; Western (non-US) countries, ODA and OOF bilateral commitments (1970-89), $7.7 billion; Communist countries (1970-89), $110 million
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<item><hi format=bold>Currency:</hi> 1 New Mexican peso (Mex$)=100 centavos
