The Mexican Economy: Stability or Stagnation? Jorge G. Gonzalez Trinity University San Antonio Business and Economics Society

Recent Economic and Political Events Economic recovery in the U.S. Economic recovery in the U.S. Mexican elections and government gridlock Mexican elections and government gridlock Mexico – U.S. relationship Mexico – U.S. relationship

Vital Signs Is the link alive? Is the link alive?

Industrial Production Index (January 2000 = 100) Source: Banco de México and FED

Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth

Real GDP % Change Source: Banco de México

Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Direct Foreign Investment Direct Foreign Investment

Foreign Direct Investment Billions of Dollars Source: Banco de México

Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Direct Foreign Investment Direct Foreign Investment Super Peso and Foreign Sector Super Peso and Foreign Sector

Exchange Rate Pesos per U.S. Dollar Source: Banco de México

Inflation Differential vs. Exchange Rate Inflation Exchange Rate Source: Banco de México

Merchandise Trade Billions of Dollars Source: Banco de México Imports Exports

Family Remittances Billions of Dollars Source: Banco de México

Family Remittances Billions of Dollars Source: Banco de México

Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Direct Foreign Investment Direct Foreign Investment Super Peso and Foreign Sector Super Peso and Foreign Sector Federal Government Balance Federal Government Balance

Government Balance Balance / GDP Source: SHCP

Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Direct Foreign Investment Direct Foreign Investment Super Peso and Foreign Sector Super Peso and Foreign Sector Federal Government Balance Federal Government Balance War on Inflation War on Inflation

Inflation Source: Banco de México

Vital Signs Is the link alive? Is the link alive? GDP growth GDP growth Direct Foreign Investment Direct Foreign Investment Super Peso and Foreign Sector Super Peso and Foreign Sector Federal Government Balance Federal Government Balance War on Inflation War on Inflation

Stagnation? Structural reform paralysis Structural reform paralysis Fiscal SystemFiscal System Energy SectorEnergy Sector Labor Market RegulationsLabor Market Regulations Judicial System and Rule of LawJudicial System and Rule of Law Educational ReformEducational Reform

Stagnation? Structural reform paralysis Structural reform paralysis Corruption scandals Corruption scandals Anemic growth Anemic growth Lack of excitement Lack of excitement

Stability or Stagnation? Source: crawfordfineart.com

Stability or Stagnation? Incredible transformation with stability Incredible transformation with stability Much work to be done Much work to be done Speed matters Speed matters

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The Mexican Economy: Stability or Stagnation? San Antonio Business and Economics Society