Mexico Expansion Mexico Macroeconomic Prospects for Investment

Mexico Expansion Mexico Macroeconomic Prospects for Investment Mexico represents an ideal target for production expansion for many reasons. The country has both low unemployment and low inflation which provides a foundation of stability in the workforce. Furthermore, the free trade agreements such as NAFTA with the North American countries allows firms to import and export goods and services with relative ease compared to other countries without such agreements. However, at the same time there are also many challenges to be found in the Mexican business environment.

For example, there is a lot of corruption in many companies and among many public officials. There are also many social issues that arise from high rates of inequality in the country as well a project labor shortage to meet future demand for labor. This analysis will provide a brief overview of the business opportunities that can be currently found in Mexico. Contents Executive Summary A. Strengths B. Macroeconomic summary 4 C. Risks 4 2. Macroeconomic Variables 5 A. GDP 5 B. Trade Balance 7 C. Business Confidence Index 9 D. Monetary and Fiscal Policies 9 E.

Lending and Currency Exchange 10 F. Employment and Wages 11 3. The Long View - Question of Sustainable Prosperity 12 4. Conclusion 13 Works Cited 14 A. Strengths: Low inflation & Low unemployment Stable currency Free Trade Agreements Low Debt to GDP ratio B.

Macroeconomic summary Economic Indicators 2013 Data Trend GDP Growth Rate 1.1% Slowing/Stagnant Trade Balance -1.01 USDB Balanced Debt to GDP 10.3% Slight Increase Inflation 4% Stable Business Confidence 53.3% Stable Currency Stability $13.08 USDMXN Stable Unemployment 5.7% Low/Stable Corruption Index 106 th/177 Persistent Corruption Global Competitiveness Index 52/144th Somewhat Competitive Human Development Index 57/188th High Happy Planet Index 22nd Mid-Range Open Budget Index 52/100 Some Info Available C. Risks Slow GDP growth Corruption/Public Safety Labor Shortage (projected) Income Inequality 2. Macroeconomic Variables A.

GDP Mexico GDP Constant Prices Mexico GDP per capita PPP Mexico GDP Annual Growth Rate Mexico GDP Growth Rate Mexico GDP B. Trade Balance Trade deficit -- imports/exports Free Trade Agreements Remittances from USA C. Business Confidence Index 1. Trend 2004 -- 2014 D. Monetary and Fiscal Policies 1. Budget Deficit 1. Government Policies E. Lending and Currency Exchange 1. Floating Exchange Rate F. Employment and Wages 1. Unemployment rate 1. Quality of good jobs 1. Income per capita 3. The Long View - Question of Sustainable Prosperity The growth of the U.S.

economy beginning in the mid-1990s perplexed many economists. Most economists did not expect to see such rapid growth based on the economic factors that were present during this period (Rivlin, 2000). There were many factors that were not expected that contributed to the growth such as technological innovation and the strengthening of the dollar against many other currencies. However, at the same time, the success that was experienced during this period still exceeded the expectations of most.

However, even though there are often surprises, the fundamentals of growing or maintaining a healthy economy are pretty steadfast; so long as the right environment exists, markets will flourish, and in that environment individuals and markets will adapt to shocks (Jordan, 2000). The spread of information in a digital age has undoubtedly acted to expedite the movement of resources, but the same kind of trends was evident with inventions such as the printing press.

The basics of a sound economy include functioning institutions, legal structures, banking and financial systems, regulations, and projections for future economic growth. 4. Conclusion The Mexican economy has much strength. Among these are the consistent growth in GDP, low inflation, and a stable.