1. Mexico United Mexican States Estados Unidos Mexicanos Mexico City 1,972,550 km 2 (about 1/5 th the area of the U.S.)

2. Population Population (2007 est.): 108,700,891 Population (2007 est.): 108,700,891 Pop. Density: 55.1 persons/km 2 Pop. Density: 55.1 persons/km 2 State of Baja California Sur: 6 persons/km 2State of Baja California Sur: 6 persons/km 2 Mexico City: 5565 persons/km 2Mexico City: 5565 persons/km 2 Growth Rate: 1.153% annually Growth Rate: 1.153% annually Net Migration: 0.432% annuallyNet Migration: 0.432% annually Life Expectancy Life Expectancy Male: 72.18 yearsMale: 72.18 years Female: 77.83 yearsFemale: 77.83 years Ethnic Groups Ethnic Groups Indian-Spanish: 60%Indian-Spanish: 60% Indian: 30%Indian: 30% Caucasian: 9%Caucasian: 9% Other: 1%Other: 1%

3. Macroeconomic Statistics GDP (USD) GDP (USD) Actual: $885BActual: $885B PPP (U.S.): $1.21TPPP (U.S.): $1.21T Per Capita: $8,140Per Capita: $8,140 Per Capita PPP: $11,160Per Capita PPP: $11,160 Growth Rate: 2.8%Growth Rate: 2.8% CompositionComposition Services: 70% Services: 70% Industry: 26% Industry: 26% Agriculture: 4% Agriculture: 4%

4. Economic Statistics cont’d Inflation Rate: 3.8% Inflation Rate: 3.8% Unemployment Rate: 3.2% Unemployment Rate: 3.2% Government Budget Government Budget Revenue: $196.5BRevenue: $196.5B Expenditure: $196.2BExpenditure: $196.2B Balance: +$300MBalance: +$300M Outstanding Public Debt: 20.7% of GDP Outstanding Public Debt: 20.7% of GDP Current Account Balance: -$400.1M Current Account Balance: -$400.1M

5. Exports/Imports Exports Exports Goods: Manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cottonGoods: Manufactured goods, oil and oil products, silver, fruits, vegetables, coffee, cotton Partners: US 85.7%, Canada 2%, Spain 1.4%Partners: US 85.7%, Canada 2%, Spain 1.4% Imports Imports Goods: Metalworking machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft, and aircraft partsGoods: Metalworking machines, steel mill products, agricultural machinery, electrical equipment, car parts for assembly, repair parts for motor vehicles, aircraft, and aircraft parts Partners: US 53.4%, China 8%, Japan 5.9%Partners: US 53.4%, China 8%, Japan 5.9% Note: Partners listed are the major players. As one will see, Mexico has many import and export partners through trade agreements.

6. Regional Trade Free Trade Agreements Free Trade Agreements NAFTA (1994)NAFTA (1994) EFTA (2000)EFTA (2000) Bolivia, Chile, Costa Rica, European Union, Israel, Japan, Nicaragua, Northern Triangle, UruguayBolivia, Chile, Costa Rica, European Union, Israel, Japan, Nicaragua, Northern Triangle, Uruguay Partial and Preferential Trade Agreements Partial and Preferential Trade Agreements Venezuela-ColumbiaVenezuela-Columbia MERCOSUR (2002)MERCOSUR (2002) Brazil, Panama, UruguayBrazil, Panama, Uruguay

7. Fiscal Policy Budget deficit targets Budget deficit targets Current Risks Current Risks Government spends too much on consumption and not enough on investmentGovernment spends too much on consumption and not enough on investment Oil Revenue: Volatile, accounts for 1/3 of revenue in the public sectorOil Revenue: Volatile, accounts for 1/3 of revenue in the public sector Tax Reform (currently only 15% of GDP) Tax Reform (currently only 15% of GDP)

8. Monetary and Exchange Rate Policy Monetary Policy Monetary Policy Largely concerned with inflation targetingLargely concerned with inflation targeting Better communication with financial marketsBetter communication with financial markets Exchange Rate Policy Exchange Rate Policy Floating exchange rate since 1994 devaluation of pesoFloating exchange rate since 1994 devaluation of peso Currency volatility: about 6% standard deviation annually vs. USDCurrency volatility: about 6% standard deviation annually vs. USD Central Bank independent of political climate Central Bank independent of political climate

9. Social Policies Unemployment Unemployment Calderon committed to loweringCalderon committed to lowering Social Security Social Security Majority of employment insurance financed privatelyMajority of employment insurance financed privately Old-age, disability, and survivor pensionsOld-age, disability, and survivor pensions Reform with U.S.Reform with U.S. Education Education Spending equal to 6.3% of GDP, higher than OECD average of 5.8%Spending equal to 6.3% of GDP, higher than OECD average of 5.8%

10. External Relations Generally good save a few minor disputes Generally good save a few minor disputes U.S. Border Disputes U.S. Border Disputes Illegal immigrationIllegal immigration Drug TraffickingDrug Trafficking Human TraffickingHuman Trafficking Water-SharingWater-Sharing Guatemalan Immigrants Guatemalan Immigrants

11. References Background Note: Mexico(2007). Department of State. Retrieved May 15, 2007, from http://www.state.gov/r/pa/ei/bgn/35749.htm. Background Note: Mexico(2007). Department of State. Retrieved May 15, 2007, from http://www.state.gov/r/pa/ei/bgn/35749.htm. http://www.state.gov/r/pa/ei/bgn/35749.htm Mexican Peso(2007). Rates FX. Retrieved May 18, 2007, from http://www.ratesfx.com/predictions/pred-mxn.html. Mexican Peso(2007). Rates FX. Retrieved May 18, 2007, from http://www.ratesfx.com/predictions/pred-mxn.html. http://www.ratesfx.com/predictions/pred-mxn.html Mexico(2007). CIA. Retrieved May 20, 2007, from https://www.cia.gov/library/publications/the-world-factbook/geos/mx.html. Mexico(2007). CIA. Retrieved May 20, 2007, from https://www.cia.gov/library/publications/the-world-factbook/geos/mx.html. https://www.cia.gov/library/publications/the-world-factbook/geos/mx.html Annual Report Summary(2006). Banco de Mexico. Retrieved May 18, 2007, from http://www.banxico.org.mx/publicadorFileDownload/download?documentId={79B04 1DA-1574-2EF4-6206-18EAABA9BCC4}. Annual Report Summary(2006). Banco de Mexico. Retrieved May 18, 2007, from http://www.banxico.org.mx/publicadorFileDownload/download?documentId={79B04 1DA-1574-2EF4-6206-18EAABA9BCC4}. http://www.banxico.org.mx/publicadorFileDownload/download?documentId={79B04 1DA-1574-2EF4-6206-18EAABA9BCC4} http://www.banxico.org.mx/publicadorFileDownload/download?documentId={79B04 1DA-1574-2EF4-6206-18EAABA9BCC4} Country Briefings: Mexico(2006). Economist. Retrieved May 15, 2007, from http://www.economist.com/countries/Mexico/. Country Briefings: Mexico(2006). Economist. Retrieved May 15, 2007, from http://www.economist.com/countries/Mexico/. http://www.economist.com/countries/Mexico/ Mexico: Policy Note on Fiscal Policy(2006). OECD. Retrieved May 20, 2007, from www.foropoliticaspublicas.org.mx/docs/Fiscal.pdf. Mexico: Policy Note on Fiscal Policy(2006). OECD. Retrieved May 20, 2007, from www.foropoliticaspublicas.org.mx/docs/Fiscal.pdf. www.foropoliticaspublicas.org.mx/docs/Fiscal.pdf Policy Brief on Mexico: Education(2006). OECD. Retrieved May 15, 2007, from http://www.foropoliticaspublicas.org.mx/docs/Educacion.pdf. Policy Brief on Mexico: Education(2006). OECD. Retrieved May 15, 2007, from http://www.foropoliticaspublicas.org.mx/docs/Educacion.pdf. http://www.foropoliticaspublicas.org.mx/docs/Educacion.pdf Mexico(2003). Social Security Online. Retrieved May 15, 2007, from http://www.ssa.gov/policy/docs/progdesc/ssptw/2002-2003/americas/mexico.html. Mexico(2003). Social Security Online. Retrieved May 15, 2007, from http://www.ssa.gov/policy/docs/progdesc/ssptw/2002-2003/americas/mexico.html. http://www.ssa.gov/policy/docs/progdesc/ssptw/2002-2003/americas/mexico.html Mexico SICE. Retrieved May 18, 2007, from http://2005.sice.oas.org/Trade/mex_e.ASP. Mexico SICE. Retrieved May 18, 2007, from http://2005.sice.oas.org/Trade/mex_e.ASP. http://2005.sice.oas.org/Trade/mex_e.ASP Knight, M. (2005). Central Bank Independence-what Role does it Play in Shaping Mexico's Economy?Bank for International Settlements. Retrieved May 20, 2007, from http://www.bis.org/speeches/sp051114.htm. Knight, M. (2005). Central Bank Independence-what Role does it Play in Shaping Mexico's Economy?Bank for International Settlements. Retrieved May 20, 2007, from http://www.bis.org/speeches/sp051114.htm. http://www.bis.org/speeches/sp051114.htm