2003 OECD Economic Surveys: Mexico 2003

image of OECD Economic Surveys: Mexico 2003

This 2003 edition of OECD's periodic review of Mexico's economy includes special features on structural reform and migration.

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Assessment and Recommendations

In most respects, Mexico’s economic performance improved over the 1990s. GDP growth was vigorous, inflation fell steadily, and the current account deficit was of only moderate size. Even the downturn which followed on the heels of the United States slowdown in 2001 was mild by Mexico’s standards. Since the 1995 peso crisis, the financial system has been strengthened and, relative to its own past history and experience in many other Latin America countries, the Mexican economy has been stable. This improvement in economic performance owes much to sound macroeconomic policies. Yet, the wideranging structural reforms of the past fifteen years, including the entry into NAFTA, have not yet led to an unambiguous rise in labour or total factor productivity growth. Even abstracting from the recent cyclical weakness, Mexico’s growth performance since the restoration of macroeconomic stability has been unsatisfactory. Potential GDP growth estimates have been revised down to below 4 per cent, too slow for a country with low levels of income and productivity and high rates of population growth, and too slow to narrow the gap in living standards relative to other OECD countries. Furthermore, the delayed impact of previous reforms is uncertain and is unlikely to raise potential growth sufficiently in the near term...

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