Sergio Vega Marin

27/01/23
Act. 2

What would be the economics

perspective of México for 2023?

Anahuac, Qro.
Sergio Vega Marin
00367029
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27/01/23
Act. 2
Mexico is one of the largest and most diverse economies in Latin America. It has a
rich cultural heritage and a young, growing population that is increasingly
becoming a major contributor to the country's economic growth. Mexico has a
market-oriented economy that has undergone significant reforms in recent
decades, including the liberalization of trade, investment, and finance. As a result,
Mexico has become an attractive destination for foreign investment and has
established itself as a major player in the global economy.

However, despite these positive developments, Mexico still faces significant

economic challenges, including poverty, inequality, and corruption, which are
slowing down the country's ability to fully realize its economic potential.
Nevertheless, Mexico continues to make progress and is poised to become an
even more important player in the global economy in the coming years.

Mexico's economy has been showing signs of improvement in recent years, and
the country is projected to continue on this positive trajectory in 2023. Despite
facing challenges such as a large informal economy, pandemic, unequal
distribution of wealth, and dependence on the US market, the Mexican government
has been implementing reforms to address these issues and enhance the business
environment. In this essay, we will examine the current projections for inflation,
Gross Domestic Product (GDP) growth, and target interest rate in Mexico.

Inflation in Mexico is projected to reach around 4% in 2023. Inflation is an

important indicator of the health of an economy, as it measures the increase in
prices of goods and services over time. In recent years, the Mexican government
has taken steps to control inflation, including implementing monetary policy
measures such as increasing the target interest rate. The central bank of Mexico,
Banco de México, has set its target interest rate at 4%, which is expected to help
keep inflation in check.
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Gross Domestic Product (GDP) is another important indicator of the health of an
economy, as it measures the total value of goods and services produced within a
country's borders. In 2023, the Mexican economy is projected to grow at a
moderate rate of 2-3%. This growth is largely driven by factors such as increased
investment, increased consumer spending, and a growing middle class. However,
the country still faces challenges in achieving more inclusive and sustainable
growth, such as addressing the large informal economy and improving access to
education and health services.

The target interest rate set by Banco de México is another important factor that
affects the Mexican economy. The central bank sets the target interest rate in order
to control inflation and support economic growth. In 2023, the target interest rate is
set at 4%, which is expected to help keep inflation in check and support economic
growth.

AMLO has become a key player in the growth of Mexico, Andrés Manuel López
Obrador, commonly known as AMLO, took office as Mexico's President in 2018
and since then has made significant changes to the country's economy.

One of the key ways in which AMLO is benefiting Mexico's economy is by

implementing policies aimed at reducing corruption and improving the business
environment. AMLO has made it a priority to tackle corruption, which has long
been a major challenge in Mexico. By addressing this issue, AMLO is creating a
more transparent and predictable business environment, which is attracting foreign
investment and creating new jobs.

Another way in which AMLO is benefiting Mexico's economy is by increasing

government spending on infrastructure, education, and health. AMLO's
government has launched a series of major infrastructure projects, including new
highways, airports, and other public works. These projects are creating new jobs
and boosting economic growth, particularly in rural and underdeveloped areas.
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Additionally, the government's increased spending on education and health is
improving the quality of life for Mexican citizens and helping to create a more
productive and competitive workforce.

AMLO's government is also focusing on helping small businesses and

entrepreneurs. The government has implemented programs and policies aimed at
helping small businesses access financing and resources, and has provided tax
incentives for new businesses. These initiatives are helping to create new jobs and
stimulate economic growth, particularly in rural and underdeveloped areas.

We can make a comparison of all these changes from the economic perspective of
2010, in 2010, Mexico's Gross Domestic Product (GDP) was growing at a
moderate pace, with an estimated growth rate of around 4.5%. The country's
economy was driven by a combination of manufacturing, services, and agriculture.
Manufacturing, in particular, was a key sector of the economy and was responsible
for a significant portion of Mexico's export revenue. The country was also a major
producer of petroleum, which contributed to its economic growth and helped to
finance government spending.

One of the biggest challenges facing Mexico's economy in 2010 was the global
financial crisis, which had a significant impact on the country's exports and foreign
investment. The crisis caused a decline in demand for Mexican goods and
services, and many companies were forced to lay off workers or shut down
operations altogether. The decline in exports and foreign investment had a
significant impact on Mexico's economy, causing a decline in GDP growth and a
rise in unemployment.

Despite these challenges, Mexico's economy was still considered to be in good

shape in 2010. The country had a well-developed financial sector, a strong
industrial base, and a relatively stable political environment, which helped to
mitigate the impact of the global financial crisis. Additionally, Mexico was able to
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rely on its strong trade relationships with the United States and other countries in
the region, which helped to support its economic growth.

However, compared to the rest of the world, Mexico's economy faces a number of
challenges and has areas for improvement.
Mexico's Gross Domestic Product (GDP) is the 15th largest in the world, with a
nominal GDP of over $1 trillion in 2021. The country has a well-developed
industrial sector and is a major exporter of manufactured goods, including cars,
electronics, and machinery. The services sector, particularly tourism, is also an
important contributor to the economy.

Despite these strengths, Mexico's economy faces a number of challenges. The

country has a high poverty rate, with a significant portion of the population living in
poverty, and income inequality is also a major issue. The economy is also heavily
dependent on the United States, which can be a challenge during periods of
economic slowdown or instability.

Additionally, Mexico's economic growth has been slower than other emerging
economies in recent years, and the country has been faced with a number of
structural challenges, including corruption, a lack of investment in education and
infrastructure, and a weak tax base. To address these challenges, the government
has been implementing a series of economic reforms aimed at improving the
business environment and boosting economic growth.

In conclusion, Mexico's economy is a dynamic and complex system that has

undergone significant changes in recent decades. Despite facing challenges such
as poverty, inequality, and corruption, the country has made significant progress in
improving its business environment and attracting foreign investment. With a
young, growing population and a rich cultural heritage, Mexico is well-positioned to
continue its economic growth in the coming years. The government has
implemented reforms aimed at addressing the country's economic challenges and
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enhancing the business environment, and these efforts are starting to pay off.
However, there is still much work to be done to fully realize Mexico's economic
potential and ensure sustainable, inclusive growth for all citizens. Nevertheless,
Mexico's continued progress and growth are a testament to the country's resilience
and potential,

The Mexican economy is projected to continue its positive trajectory in 2023, with
inflation at around 4%, GDP growth at 2-3%, and a target interest rate of 4%.
Despite facing challenges, the Mexican government has been implementing
reforms to address these issues and enhance the business environment, and the
country is poised for continued growth and development in the coming years.