Economic Outlook

^1/ Annual inflation rate.
^2/ End of period.

In 2009, Mexico faced a more volatile and less favorable international economy due to the economic recession in the world´s main economies and the deceleration of the emerging and less developed countries.

Although during 2009 the Mexican authorities implemented economic policy measures aimed to mitigate the negative impact of the less favorable international environment, the Mexican economy fell down 6.1% in that year.

During the first half of 2010 the global economy registered a stronger growth, led by the emerging economies of Asia, however since the third quarter of 2010, the global growth started to slow down due to the problems faced by the USA and some countries in the EU; particularly because of the mixed overcomes in their economic indicators; higher unemployment; and troubles in their financial and fiscal sectors. That situation generated uncertainty around the world.

Mexico recorded a solid economic growth in the first half of 2010. In the second half the rate of growth slowed slightly. The Mexican GDP grew 5.5 per cent in 2010, its best performance in the last ten years. This was the result of the recovery in exports, which reached the levels previous to the beginning of the crisis; the strengthening of aggregated demand and the solid public finances. Over 730 thousand jobs were created in 2010.

During 2011 the world economy is expected to show a slower rate of growth. The Asian emerging economies are projected to continue expanding rapidly. USA is expected to accelerate its growth because of the fiscal stimulus implemented by the American authorities, while Europe will continue with the uncertainty due to high debts and deficits.

According to recent projections of Mexican authorities, international financial institutions and private banks, the Mexican economy will grow between 4% y 5% in 2011. It’s expected a balanced growth between the export sector and the domestic market.

Note: Some data in this paper could change due to further revisions and updates, as is the case of GDP.