Mexico’s main trading partner by a considerable margin is the US and some 85% of the country’s exports are dependent on markets in N. America. Because of this dependence, Mexico’s external trade has suffered this year because of the weak demand from its northern neighbour. Despite the economic downturn in the US 2008 furniture and household goods exports held up well.
Mexico/US trade US$ millions
2004
2005
2006
2007
2008
Sawnwood
20.1
16.3
14.6
14.9
12.2
Plywood and veneers
7.1
5.2
5.3
8.2
4.8
Furniture
1,175
1,230
1,291
1,189
1,085
Interest rates held Mexico's central bank has decided to hold interest rates at 4.5% a rate that has been in force for the past four months. For most of the year interest rates have been progressively cut in an attempt to spur growth.
Good news and bad In the third quarter 2009 the Mexican economy grew by a reported 2.9% but, for the year as a whole it is estimated that GDP will fall by between 6-7%. On the positive side inflation at around 4%, just 1% more than the goal set by the Central Bank, is expected to fall in 2010.
World Bank support In other news the World Bank recently approved a $1.5bn loan to Mexico in support of the Mexican government’s economic stimulus measures Analysts expect most of the effort to be put into stimulating employment and into financial regulatory reform.
