Mexico’s geographical terrain is characterized by rugged, high mountains; high plateaus; low coastal plains; and deserts. Its climate varies from desert to tropical year round. Mexico is gifted with high value minerals and natural resources like petroleum, copper, silver, gold, zinc, lead, timber, and natural gas. Its location in the border south of the US is considered strategic in world trade and economic activities.

The Mexican Economy ranks from 11^th to 13^th among world’s largest economy. The Mexico City the country’s capital also ranks 3^rd among world’s largest metropolis with Tokyo of Japan and New York of the US leading the list.

Since the dreaded 1994 crisis, Mexico developed and improved its macroeconomic fundamental resulting to a boost in the economy and an unprecedented stability. Its attained macroeconomic stability enables low interest and inflation rates, increased per capita income. The economy holds rapidly-developing industrial and service sector and a robust import-export business. Based on Forbes Global 2000 lists of 2008, 16 companies among the world’s largest companies were from Mexico.

Economic Sectors

The Export industry is the most profitable sector in the Mexican Economy. Mexican Exports represent a quarter or more of the country’s Gross Domestic Product (GDP). The Mexican Trade policy is an open market and is considered as among the most open in the world. The Mexican government forged free trade treatises and agreements with more than 40 countries like Canada, the European Union, and notably the United States. Most exported products are cars, petroleum, and electronics with the bulk of these exports (82%) goes to the US.

Tourism, ever since the 1960’s played a major part in the Mexican economy. Mexican tourism accounts to a considerable fraction of the country’s GDP with millions of tourist flocking to Mexico. As a matter of fact, Tourism has become the fastest growing sector in the Mexican economy and accounts for 50 billion dollar contribution to the economy.

The Manufacturing sector also contributes a major part of the Mexican Economy. With estimated 18% GDP contribution, this sector is mostly involved in ship building, steel, chemicals, textiles, and electronic components.

Agriculture is also a sector to reckon in Mexican economy. Although this sector accounted for a measly 3.7% of the country’s GDP as of 2008, it provides 14% of total employment in the country. With an arable area only 13% of the country’s land area, Mexico boast of its revenue generating crops like tomatoes, sugarcane, corn, dry beans, coffee beans, and avocados. Significant revenue is also generated from beef, pork, poultry, and dairy production.

The Oil sector is also a sector to beat, with its revenue constituting a third in the total Mexican revenues. As of 2007, Mexico ranks eight-largest crude exporter in the world and third-largest oil supplier to the US. The Mexican Government holds the monopoly in oil exploration, production, marketing, and transportation through the state-owned PEMEX oil company.

Recent Economic Problems

Just recently this year (early 2009), the Economic crisis in the US escalated to a more serious World scale crisis affecting not only the US but other big economies like Japan and Europe, as well as most of the world. With the US – Mexico’s biggest export partner, undergoing recession, Mexico experiences a decline in export revenue that greatly affects the total GDP. With the US predicted to start rebounding soon, the Mexican government is hopeful that businesses will soon go back to normal.

In addition to the Global financial crunch, the Tourism industry is suffering setbacks caused by the H1N1 flu pandemic and political unrest. Tourist had been distrustful in visiting Mexico with reported violence on the rise which accounted for 11,000 people killed in this violence since the December 2006 election.

Amidst these problems the Mexican Government sees optimism with some propose measures for labor and tax reforms and new energy policy on the works. Mexico will rebound again, that is for sure.