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Mexico Political and Economic Outlook 2011 to 2015

Updated on July 31, 2012

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Mexico's General Outlook 2011-2015

This hub takes a look at Mexico political and economic outlook for 2011-2015. The main sources for this outlook include Economist Intelligence Unit (EIU), CountryWatch, the U.S. State Department, and CultureGrams. According to the Economist Intelligence Unit updated report for November 2010, the following are the highlights of Mexico political and economic outlook for 2011-2015:

• The opposition PRI will co-operate with the ruling PAN on some of the reform

proposals of the president, Felipe Calderón, but energy and labour reforms are

unlikely to advance during the remainder of his term, which ends in 2012.

• For most voters the PRI will be the only acceptable alternative to a

beleaguered PAN, which, given the bleak economic outlook and the

deteriorating security situation, has weak prospects of securing a third term.

• GDP growth of 5% in 2010 will mark only a partial recovery from a 6.6%

contraction in 2009. We expect growth to slow to 3% in 2011 as the US slows,

before firmer growth of around 3.8% annually in 2012-15, as the US picks up.

• We now expect the central bank to keep interest rates on hold throughout

2011, but a solid inflation-targeting regime, combined with weak demand-side

pressures, will keep inflation contained. Rates are forecast to rise from 2012.

• Reserves will help shield against volatility, but concerns about the recovery

will prevent peso appreciation in 2011. A wider current-account deficit and

the normalisation of US rates will prompt some weakening from 2012.

• A wider trade deficit will increase the current-account deficit to 2.2% of GDP

by 2015, from an estimated 1.1% of GDP in 2010. However, given projected

investment inflows, this will remain manageable.

Fun Facts About Mexico

The country intelligence wire CountryWatch offers the following fun facts about Mexico:

Key Data Region: North America between the United States and Guatemala in Central America

Population: 109,561,057

Area Total: 1,972,550km2

Area Land: 1,923,040km2

Coast Line: 9,330km

Capital: Mexico City

Climate: Varies from tropical to desert.

Languages: Spanish, Various Mayan dialects.

Currency: 1 Mexican peso (Mex$) = 100 centavos

Holiday: Independence Day is 16 September (1810), Constitution Day is 5 February, Cinco de Mayo is 5 May (celebrated mostly in one state in Mexico, the State of Puebla and is called El Día de la Batalla de Puebla).

Average Daily Temperature January: 13.30°C / 55.90°FJuly: 16.70°C / 62.10°FAnnual Rainfall: 762mm / 30"

Boundaries United States 3326km Guatemala 962km Belize 250km

Notable Cities City Population Estimated

  • Mexico City 8,560,994 2010
  • Ecatepec 1,997,036 2010
  • Tijuana 1,659,872 2010

Ethnic Divisions Mestizo 60 % Indigenous 30 % European descent 9 % Other 1 %

Religions Nominally Roman Catholic 89 % Protestant 6 % Other 5 %

Mexico Political Outlook 2011-2015

According to the Economist Intelligence Unit's (EIU) report for November 2011, Felipe Calderon, the president of Mexico will remain in office until the end of 2012, but will continue to struggle with an uncooperative legislature. The legislature, mostly made up of members of the opposition party, has hindered progress on the president's reform agenda.

Even so, EIU observers forecasted the government will not lock down completely due to the opposition party's (the Partido Revolucianario Institucional) apparent willingness to cooperate with the ruling party (the Partido Accion Nacional). In order to appear cooperative the opposition party will go along on some issues to position themselves for more votes in the upcoming 2012 election. Still, Mexico President Calderon will be unable to force any real progress in major issues including taxes, labour, and energy policy.

EIU reporters forecasted President Calderon unlikely to win a third term and accordingly the opposition party PRI will regain the presidency in July 2012. However, there is an outside chance Calderon's party could form a coalition with the Partido de la Revolucion Democratica (PRD).

Conspicuous in its absence from the EIU report is any mention of the drug cartels and the continuing struggle to end the drug war. Although, they did mention that there is little chance the current government will be able to get the violence and rampant crime under control by the next election in late 2012.

Political Outlook Update August 2012

Mexico's old regime regained the presidency in July 2012. This was as predicted by commentators from the Economist Intelligence Unit. Enrique Pena Nieto ran as the presidential candidate for the Institutional Revolutionary Party (PRI) which ruled Mexico politics for nearly three quarters of a century. According to Reuters, Nieto's margin of victory was much smaller than expected. Consequently, Nieto will most likely be forced to forge alliances with other parties to accomplish his proposed reforms.

Mexico Economic Outlook 2011-2015

Even as the economy has experienced a small bounce back from a contraction in 2009, the Economist Intelligence Unit observed that significant improvements in the Mexico economy are unlikely in in the forecast period. According to the EIU experts, Mexico Economic Outlook for 2011-2015 will be hindered by the slow pace of much needed upgrades to economic infrastructure and an over reliance on decreasing oil revenues.

While the government authorities are expected to attempt to improve the business environment by cutting red tape and improving competition, EIU experts believe these efforts will be insufficient to address the root causes of Mexico's sluggish economic growth bogged down by the infrastructure problems and an underperforming education system.

Moreover, a decline in crude production due to under investment by the Mexican state oil firm Petroleos Mexicanos (Pemex) and a weak non-oil tax base are expected to draw funds away from public investment. In the face of forecasted weakness in domestic demand, the government will be reluctant to cut expenditures in 2011 leading to a persistent fiscal deficit of 2.3% of GDP in 2011, The deficit is expected to decrease assuming stable growth in the latter part of the forecast period.

In terms of economic growth, Mexico Economic Outlook for 2011-2015 seems to indicate the Mexico will be one of the only Latin American countries not to make a full recovery in 2010. Furthermore, growth in at least the near term will be sluggish at best, estimated to 3% in 2011 and only slightly higher each year to 2015. Export-oriented manufacturing is foreseen to increase more than domestically oriented services due to evidence that some Chinese firms will choose to set up factories in Mexico for export into the US and other firms choosing Mexico over China due to lower transport costs. All other sectors including utilities and construction, tourism, agricultural and financial services are expected to remain weak with only gradual improvement in the forecast period.


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    • Miss Info profile image

      Miss Info 3 years ago from New York City

      Very interesting hub. Check out my hub on developing Mexico:

    • profile image

      Ocampillo 5 years ago

      A lot of information is incorrect in this page (fun facts; middle america? Mayan dialects? New mexican peso? Cinco de Mayo? Tiajuana?)

      Please review your info sources.

      Oscar Campillo Valdez

      Mexico City

    • profile image

      fcont148 5 years ago

      I believe that it is time for the United States to focus on the drug problems that are spilling over from Mexico. Why can both countries unite and fight the war on drugs. We have so much technology and resources that we can use to help the Mexican government bring this problem to a controlled level. We have to be realistic an know that this problem trough out the world will never go away unless our society changes. I myself been a native from Mexico see a willingness in the government to change the old ways and we should realize that in order for Mexico to be prosperous they also have to deal with corruption. With out this problem been fixed there is no use on this war on drugs.

    • profile image

      ttttttttttttttttt 5 years ago


    • ecoggins profile image

      ecoggins 5 years ago from Corona, California

      Kevin, thank you for sharing your ideas. I think you make valid points. certainly it is a complex problem that needs creative solutions. opening up the dialogue would be a great step forward.

    • profile image

      Kevin Vazquez 5 years ago

      Hey guys, as a Mexican I would like to find the right thing to do but the party that was before PAN never showed care about the country´s interest. Why should I trust now on them? I think that the problem of drug cartels is as complex that is tough to fully understand. On one hand we have lots of problems in my country related with inequalities and lack of opportunities, and on the other hand we have a greedy market in the north that not only is consuming whatever shit they ask, but also guns and big weapons are got from the US. I think that it is time to have a sit and discuss, and make smart decisions before this end up in a real catastrophe. Both sides are interested in that each side would be peaceful and free of any violence. Please bear in mind that we´ll be neighbors forever! Cheers

    • profile image

      MARK 5 years ago


    • profile image

      frank 5 years ago

      *the war against drugs

    • profile image

      Frank 5 years ago

      Hey do we know what the PRI's position is on the drug war if they win the presidency? Will they countinue or stop?

    • profile image

      LIUS MDZ 6 years ago

      PRD AND PAN I have to see that

    • ecoggins profile image

      ecoggins 6 years ago from Corona, California

      Thank you caribketch for sharing. Legalizing marijuana in the US will not bring the war in Mexico to an end. The drug cartels are as much about power as they are about selling drugs. In fact, taking money away from the cartels through the legalization of marijuana will likely make them more desparate and even more violent.

      Secondly, alcohol and tobacco have destroyed more lives than just about any other force in the history of the world including pride and greed. Laws against the use of tobacco are getting stronger because the health risks have been enormous. Alcohol is the leading cause of spousal abuse and child abuse and the second leading cause of car related deaths. So if marijuana is not any more of a threat than these two extremely destructive substances why would we want to legalize it. Besides, the two substances steal massive amounts of money from family budgets which again destroys families. Not to mention the burden placed on the U.S. economy in terms of unnecessary healthcare costs and wasted discretionary funds which can be used on other more legitimate products and services.

      Third, the way the tiny island nation called Great Britain conquered the massive country called China was by drugging them into a lethargic stupor by getting them addicted to opium.

      So as far as I am concerned let the masses ridicule the U.S. government's stance against the legalization of marijuana. Legalizing the substance will not put an end to the drug cartels and will translate to further decline in the U.S. economy and the value system upon which the U.S. was founded.

    • profile image

      caribketch 6 years ago

      Seeing as how recent polls indicate approximately 50% of U.S. citizens favor the legalization of marijuana, it is no longer a question of "if" but a matter of "when." Like it or not, there is no empirical evidence supporting the contention that marijuana is any more of a threat than tobacco or alcohol. The roots of the anti-marijuana mentality in the U.S. have been well documented and much ridiculed. Unfortunately, there remain many people ignorant of the reasons for the strange, inexplicable and extremely expensive war against the popular substance. Didn't we learn anything from the dismal failure of the Volstead Act?

    • ecoggins profile image

      ecoggins 6 years ago from Corona, California

      Thank you Edelen for posting the video. It is very telling and moving.

    • profile image

      EDELEN MELO 6 years ago

    • ecoggins profile image

      ecoggins 6 years ago from Corona, California

      ropima, I appreciate your input. Obviously, you do not need me to vaildate your opinion. The US definitely has major issues to address and obstacles to overcome.

    • profile image

      ropima 6 years ago

      With all due respect, most americans don´t even know where they live as they call the US america, In case you didn´t know "Mexico" as a country is in America too. The american continent. It is too sad to hear some people that don´t even know a little bit of geography because they can´t see beyond their nose !!! The other day I heard Donald Trump saying the US should go and take the oil from Lybia... I mean, you think you guys are God or what !!! You think you can just go invade a country and steal their oil !!!! same old excuse with Iraq !!! that is just B.S. The us is not Helping any body in Lybia, they are just there because of the oil. you should pay attention to your economy that is about to crash... the US is just printing money out of thin air and what happens to a bubble !!!! well it will just burst !!!! so let´s just see and wait for the us dollar TO COLLAPSE !!!! Unfortunately, yes there will be an economical chaos. But what goes UP, Must come down !!!!

    • daskittlez69 profile image

      daskittlez69 6 years ago from midwest

      Thanks for the hub. I follow world news but for whatever reason I never really pay attention to Mexico.

    • ecoggins profile image

      ecoggins 6 years ago from Corona, California

      Thank you Antonio for the update. Sounds Like Mexico is doing well.

    • profile image

      Antonio 6 years ago

      Mexican economy will be full recovered by the end of 2011 from the 2009 depreciation (6.6%), growth in 2010 was 5.5% and is expected 3.5 to 4% in 2011.

      International reservois are on its highest historic record. Very low debt and inflation. Mexican economy situation is so helthy rith now, but it can be afected eventually by the international (Europe and U.S) situation.

      War against cartels, U.S needs to take a more active part on this, due his role on drug consumption and weapon provider for the cartels.

      Notable cities of Mexico_ Guadalajara (4 millions) Monterrey (3 millions) Puebla ( 2 millions) Mexico city and metropolitan area (20 millions).

      Saludos from Mexico.

    • ecoggins profile image

      ecoggins 6 years ago from Corona, California

      lapo, I couldn't agree with you more.

    • profile image

      lapo 6 years ago

      Live in two countries will improve drastically, if only US citizens would stop smoking and sniffing this garbage.

    • ecoggins profile image

      ecoggins 6 years ago from Corona, California

      Ashley, you ask a great question? Politicians familiar with Mexico's situation want to tell us that if the U.S. and Mexican economies improved than the drug cartels would lose steam. I think as long as they think they can make mounds of cash they will continue to do what they are doing whether the economies of the US and Mexico improve or not.

    • profile image

      Ashley 6 years ago

      But the economy of the u.s won't entirely affect that much will it?

    • ecoggins profile image

      ecoggins 6 years ago from Corona, California

      G gates, thank you for your comments. The USA does seem to be losing credibility more and more. The war at or southern border may be more important to the future of the US than those which are going on in Central Asia.

    • profile image

      G gates 6 years ago

      As for the cartels in Mexico, if we don't do something effective in the country now, in the next few years we'll probably see ourselves on the same mirror.

    • profile image

      G gates 6 years ago

      As things are going now with the US economy, Mexico is up to teach us a good lesson.

    • profile image

      yyify 6 years ago

      "In terms of economic growth, Mexico Economic Outlook for 2011-2015 seems to indicate the Mexico will be one of the only Latin American countries not to make a full recovery in 2010" proved to be wrong..GDP went over 5%...

    • ecoggins profile image

      ecoggins 7 years ago from Corona, California

      James, thank you for your continued encouragement. I cannot say I'd never heard of it either. EIU, CountryWatch and CultureGrams are excellent intelligence sources that I am fortunate to have access to and I must give them the credit for much of what is written in this article.

    • James A Watkins profile image

      James A Watkins 7 years ago from Chicago

      Thank you for the research you put into this. I find it needful and interesting. I admit I had never heard of Ecatepec until today. :)

    • ecoggins profile image

      ecoggins 7 years ago from Corona, California

      dahoglund, you are most definitely right. The drug war has spilled over into the U.S. and few of us understand the extent of how the Mexico drug cartels have infiltrated the southwestern states including New Mexico, Arizona, and California.

    • dahoglund profile image

      Don A. Hoglund 7 years ago from Wisconsin Rapids

      Most of us are not aware of the influence of Mexico's condition might have on us.