NEWS

WIRES

OTHER

Research and Markets: OECD Economic Surveys: Mexico 2009 Finds That Mexico Is Being Hard Hit by the Financial Crisis and World Economic Downturn

Despite improved fundamentals, Mexico has not escaped the world economic recession. The global manufacturing downturn and the collapse of trade, notably with the United States, have depressed the real sector. Reduced availability of credit has started to bear on activity, although the financial sector has so far weathered the global crisis. Low oil prices are putting pressure on budget revenue, despite a welcome hedging this year. The change of sentiment of international investors towards emerging-market borrowers has led to reduced net capital inflows and a large depreciation of the currency. The outbreak of influenza is likely to also contribute to the downturn. Thus, growth is set to be negative this year and recover only gradually in 2010. The authorities have responded with liquidity measures, lower interest rates, foreign currency interventions and a fiscal stimulus. But there might be room for more policy action.

This 2009 edition of OECD's periodic survey of the Mexican economy finds that Mexico is being hard hit by the financial crisis and world economic downturn. In addition to a chapter examining how to overcome the crisis, this edition also includes chapters on managing the oil economy, achieving higher performance in health and education, and structural reforms to boost long term growth.

Key Topics Covered:

• Executive Summary
• Assessment and Recommendations
• Chapter 1. Overcoming the Financial Crisis and the Macroeconomic Downturn
• -The macroeconomic outlook is worsening rapidly
• -A mild financial crisis but a severe downturn of output
• -The near term outlook remains dim
• -Adverse labour market impact
• -The macroeconomic policy mix is getting more coherent
• Chapter 2. Managing the Oil Economy - Can Mexico Do It Better?
• -Mexico's challenges with oil revenues
• -Reforming the fiscal rules
• -Preparing for a world with less oil resources
• -An expedite and adequate implementation of the reform of Pemex is needed to improve the efficiency of the oil economy and maximize oil income
• -Additional reform should be considered if necessary
• -Concluding remarks
• Chapter 3. Achieving Higher Performance: Enhancing Spending Efficiency in Health and Education
• -Introduction
• -Health spending
• -What can be done to improve efficiency in the Mexican health system?
• -Efficiency of spending on primary and secondary education
• -What can be done to improve the efficiency of the education system?
• -Concluding remarks
• Annex 3.A1. Details on data envelopment analysis (DEA)
• Chapter 4. Pedal to the Metal: Structural Reforms to Boost Long-Term Growth and Spur Recovery from the Crisis
• -Mexico's growth performance compared - some salient facts
• -Sources of differences in living standards and growth
• -Sectoral labour productivity and shift-share analysis
• -Mexico's convergence with high-income countries has been slow
• -What do models tell about factors that hold back Mexico's growth rate?
• -Where to from here? Policies priorities for lifting growth further
• -Concluding remarks
• -Annex 4.A1. Progress in structural reform
• -Annex 4.A2. Data and methodology
• -Annex 4.A3. More details on the models used

For more information visit http://www.researchandmarkets.com/research/ea173c/oecd_economic_surv.

Research and Markets
Laura Wood, Senior Manager,
press@researchandmarkets.com
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716