Mexico’s free market economy is large and relatively stable. Its gross domestic product (GDP) of nearly US$1.1 trillion was ranked fifteenth globally by the World Bank (2017) out of 198 countries measured and is the second largest economy in Latin America.
Mexico is the third largest trading partner of the United States and represents the second largest export market for U.S. products and services. Since the implementation of the North American Free Trade Agreement (NAFTA) in 1994, Mexico’s share of U.S. imports has increased from 7 percent to 12 percent and its share of Canadian imports has doubled to 5 percent. Mexico also has free trade agreements with over 50 countries.
More than 90 percent of global trade conducted by Mexico is under free trade agreements. The country is expected to import US$448 billion in goods and services in 2018 and is forecast to export US$437 billion this year.
The Mexican economy is increasingly dominated by the country’s private sector and is driven by expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution and airports. Mexico is among the world’s top 25 countries in its proportion of manufactured goods exported that are high-tech.
Although Mexico has a comparatively strong global economy, income distribution remains highly unequal. The country’s per capita income is roughly one-third that of the U.S. and nearly 50 percent of the country is classified as poor.
The OECD forecasts GDP growth for 2018 to be 2 percent. The inflation rate is expected to be 3.8 percent by the end of 2018 and the unemployment rate 3.5 percent.