Mexico: Output to moderate

Output growth is likely to moderate, reflecting weaker public spending and faltering external demand. But private investment and consumption should remain strong, and GDP growth is projected to reach 3.5 to 4% in 2007 and 2008. After turning up in the third quarter of 2006, inflation should come down. With the terms of trade deteriorating, the current account deficit should widen gradually.
Monetary policy is expected to ease in early 2007 once inflation has come down. With less growth and lower oil receipts, the environment for fiscal policy will become more difficult, but the fiscal position should not be allowed to weaken. A reform is needed to widen the tax base with a view to reducing distortions and financing essential spending programmes on a stable basis.
Population (000s), 2005105 300
Area (000 sq km)1 996
GDP (Billion USD), 20051 134.9
Life expectancy at birth (Women, Men), 200477.6, 72.7
Total labour force (000s), 200542 463
Government typeFederal Republic
Indicators% change unless otherwise indicated
GDP growth4.73.63.7
Consumer price index3.63.63.2
Unemployment rate (%)
Current account balance (% GDP)-0.2-1.0-1.4
Source: OECD©OECD Observer No. 258/259, December 2006

Economic data


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