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Possible effects of the US economic crisis on Mexico

Possible effects of the US economic crisis on Mexico. Herald Rivera Luis Briones 3/5/2009. Economy. Mexico is highly dependent on exports to the U.S., which represent more than a quarter of the country's GDP

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Possible effects of the US economic crisis on Mexico

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  1. Possible effects of the US economic crisis on Mexico Herald Rivera Luis Briones 3/5/2009

  2. Economy • Mexico is highly dependent on exports to the U.S., which represent more than a quarter of the country's GDP • Real GDP grew by 4.8% in 2006 and by 3.3% in 2007, but is expected to grow only by about 2% in 2008 and from 0.5% to 1.5% in 2009 • On February 26th the bank declared that consumer prices rose 6.53% in 2008, their fastest pace since 2001

  3. Imports/Exports with the U.S.A • In 2007 the U.S bought about 82% of its exports • Top Mexican exports to the U.S. include petroleum, cars, and electronic equipment • Foreign direct investment (FDI) in Mexico for 2007 was $ 25 billion, $9.9 billion FDI from the U.S.)

  4. Unemployment • In 2008 2.6 million jobs were lost in the U.S economy • Economist predict an additional 1.5 to 2 million jobs will be lost in 2009.

  5. Remittances • U.S unemployment >> Remittances • Mexico’s second source of foreign income • Remittances fell 3.6% in 2008 Future for Remittances • Negative predictions of • unemployment • Stricter enforcement of • illegal immigration

  6. Consumer Spending • Major force behind the US economy, accounts for 2/3 of the overall economic activity • Tourism • Mexico’s third source of foreign income

  7. U.S recession on Mexico • Petroleum • Remittances • Tourism "The U.S. economy has fallen into a deep recession....This phenomenon of unprecedented magnitude has spread rapidly to all regions.. Mexico is no exception, especially because it's economy is closely linked to the economy of the U.S." -President of Mexico  Felipe Calderon

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