Mexico’s economy rebounded in 2004 from years of slow economic performance. The country’s gross domestic product (GDP) grew by 4.4 percent in 2004; in contrast, the Mexican economy shrank by 0.2 percent in 2001 and grew by only 0.8 and 1.4 percent in 2002 and 2003, respectively. A combination of high global oil prices and economic recovery in the United States has driven the economic recovery in Mexico. Global Insight forecasts that Mexico’s GDP will grow by 3.6 percent in 2005.
The oil sector is a crucial component of Mexico’s economy. While its importance to the general Mexican economy has declined, the oil sector still generates over 10 percent of the country’s export earnings and one-third of government revenues. Another important part of the Mexican economy is the maquiladora
sector, consisting of manufacturing plants located near the U.S. border. The maquiladora
plants import raw materials from the United States, and then re-export the finished products duty free to the U.S. Other key economic sectors include the manufacturing of automobiles and machine tools.