- President Donald Trump’s threats to impose tariffs on Mexican products have put that country’s economy in the spotlight.
- Despite Mexico having the 15th largest GDP in the world, about half of all Mexican citizens live in poverty.
- Here are 11 surprising facts about Mexico’s economy.
- Visit MarketsInsider.com for more stories.
Last week, President Donald Trump’s threat to impose a 5% tariff on all Mexican imports was narrowly averted – perhaps only temporarily – thanks to a last-minute agreement for Mexico to stem illegal immigration to the US.
The news has thrust Mexico’s economy into the global spotlight.
Mexico has a strong economy with a gross domestic product that ranks 15th globally, thanks largely to its manufacturing and petroleum exports. But Mexico is also a nation of contradictions. Its economic power translates poorly to the country’s populace, almost half of which live in poverty.
Meanwhile, Carlos Slim, Mexico’s richest man and the sixth richest person in the world, has a net worth equal to 5% of Mexico’s entire GDP.
Here are 11 surprising facts about Mexico’s economy:
More Mexicans are leaving the US for Mexico than the other way around
Although Mexican immigration is the subject of fierce debate in American politics, the fact remains that immigration is going in the opposite direction.
Statistics from the Pew Research Center show that from 2009 to 2014, about 1 million Mexican immigrants and their American-born children left the US to return to Mexico, while about 870,000 Mexicans entered the US in the same time span.
Mexico has more than four times Canada’s population, but its GDP is smaller
NAFTA has been a boon to the economies of its member nations, perhaps none more so than Mexico.
But Mexico still trails its North American partner Canada in terms of gross domestic product.In 2017, Mexico’s GDP was 1.15 trillion, compared to Canada’s 1.68 trillion.
It’s worth noting that Mexico’s population of about 126 million is more than four times that of Canada.
Of course, both marks are still eclipsed by the United States’ $US18 trillion GDP.
Mexico is the No. 1 source of imported cars in the US
Mexico has become an integral part of the US automotive industry.
Not only do American carmakers build a significant portion of their cars in Mexico, but 89 of the world’s top 100 auto-part makers have production facilities in the country.
Last year, the US imported $US93 billion worth of cars and car parts from Mexico. Many auto brands continue to make significant investments in Mexican factories, including Ford, Audi, Mercedes Benz, BMW, and Nissan.
Over 40% of Mexico’s population lives in poverty
Living conditions in Mexico are challenging for many of its residents.
As defined by the Mexican government, about 33% of the population lives in “moderate poverty” and another 9% lives in “extreme poverty.” That means that more than 40% of the population lives in poverty, and the numbers are trending upward.
As a consequence, about 34 million Mexicans live more than two to a room in houses built from such poor construction materials as cardboard and reeds.
One man in Mexico has a net worth equal to about 5% of the country’s GDP
There’s an enormous disparity between the rich and poor in Mexico, and perhaps nowhere is that better illustrated than with a glimpse at Carlos Slim, the richest man in Mexico.
Slim’s net worth is estimated to be around $US55.2 billion, and is possibly as high as $US64 billion, which is between 5% and 6% of the nation’s $US1.15 trillion GDP.
The 79-year old billionaire owns 57% of Latin America’s largest mobile-phone company, America Movil, along with holdings in hundreds of other businesses throughout Mexico.
Mexico’s oil production has plummeted by 50% in recent years
When it comes to petroleum, Mexico was once in a rarefied club of oil-producing states. As recently as 2005, Mexico produced 3.8 million barrels a day, making it the fifth-largest producer in the world, behind only Saudi Arabia, Russia, the United States, and Iran.
But Mexico’s primary oil producer, Pemex, hasn’t been able to keep pace, in part due to heavy taxation and a lack of funds to find new oilfields and upgrade its infrastructure. By 2016, production had dropped by half and the country no longer even made the top 10 list of producers.
Mexico’s drug cartels earn as much as $US49.4 billion a year
The Mexican War on Drugs is an ongoing asymmetric conflict waged between the Mexican government and various drug cartels.
Despite attention from the police and Mexico’s military (as well as assistance from the US), the cartels have actually grown in influence in the last few decades, in part because they have filled power vacuums left by the demise of Colombian drug operations in the 1990s.
Mexican cartels are now responsible for as much as 90% of the cocaine entering the US, and their wholesale earnings reach as high as $US48.4 billion each year.
The death toll in the Mexican War on Drugs might exceed 125,000
Accurate tallies are difficult to come by when it comes to Mexico’s drug war.
The numbers generally reported in the US press hover around 60,000, but the Trans-Border Institute, which publishes an annual report on drug-related violence in Mexico, estimates the total number of deaths between 2006 and 2012 to be between 120,000 and 125,000.
Distressingly, this number doesn’t include as many as 27,000 adults and children who are classified as missing due to the conflict.
Mexico City is sinking 3 feet a year because of its water usage
Mexico City, home to 9 million residents within the city limits alone, is sinking.
The Mexican capital relies on aquifers below the city for its drinking water, and that has seriously compromised the integrity of the city’s foundation. The city sinks about three feet a year, and in fact has already dropped more than 32 feet in the last 60 years. Many of the city’s structures are leaning, and some are in danger of collapse.
This isn’t a unique problem – a number of cities worldwide are at risk as water tables are depleted – but Mexico City is in crisis as the city runs out of affordable drinking water while simultaneously contending with simultaneous infrastructure and ecological crises.
Mexico gets more money from remittances than from oil exports
Migrant workers and other immigrants often send money home via international money transfers. These are known as remittances, and Mexico’s remittances added up to more than $US26 billion in 2017, according to CNN.
That exceeds most of the nation’s other sources of foreign income – even petroleum exports, which add up to only about $US18.5 billion. Mexico ranks as the second largest receiver of remittances in the world behind India. The vast majority of that money comes from the US, and in fact, Mexico is the largest recipient of remittances from the US.
Mexico City has the largest taxi fleet in the world
Mexico City has a population of about 9 million people, putting it on parity with other large metropolitan cities like New York City. But while NYC has about 14,000 taxi cabs, Mexico City is home to over 100,000 registered taxi cabs – the largest fleet in the world, and the most taxis per citizen.
For most of its history, more than half of Mexico City’s taxis were green Volkswagen Beetles, though in the early 2000s, legislation intended to improve fuel efficiency and safety rendered virtually all of them extinct.
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