Faced with rising inflation expectations, the successive moves to tighten the monetary policy stance during 2004 have been appropriate. On the fiscal front, the 2004 budget target will be easily met, thanks to higher-than-projected oil revenues. The supportive revenue environment should continue to be used to consolidate public finances. A revenue enhancing tax reform is required to reduce the vulnerability of public finances to oil price changes.

Population (000s), 2003	102 708
Area (000 sq km)	1 996
Currency	Peso
GDP (Billion USD), 2003	625.6
Life expectancy at birth (Women, Men), 2002	77.1, 72.1
Total labour force (000s), 2003	40 745
Government type	Federal Republic

Indicators	% change unless otherwise indicated
	2004	2005	2006
GDP growth	4.2	3.9	4.2
Consumer price index	4.6	4.5	3.4
Short-term interest rate (%)	6.8	7.8	8.1
Unemployment rate (%)	2.4	2.3	2.3
Current account balance (% GDP)	-1.4	-1.5	-1.9

Source: OECD© OECD Observer No 245, November 2004