The Outlook for the Mexican Economy
To properly understand Mexico's present predicament with regard to its domestic and international economic policy, it is useful to review briefly some of the background from the 1960s and 1970s. From 1960 to 1970, the Mexican economy grew at a fairly steady rate of 7 percent per year, while population rose at 3.5 percent, thus allowing for an average annual increase in per capita GDP of almost 3.4 percent. By 1970, GDP per capita was already equivalent to some US$500, at 1960 prices. Inflation during this periad was minimal. Real wages in the formal employment sector rose steadily. External financing was modest; total public external debt by 1970 was only US$4.3 billion, interest on external debt was a mere $200 million and meant allocating to it less than 1 percent of total exports of goods and services. Aggregate exports in 1970 were $1.3 billion, and exports per capita, $25. Food and agricultural products were the main source of foreign exchange (48 percent), followed by a rising amount of manufactured exports (34 percent). Mexican exports were barely 0.4 percent of world exports. Crude oil was hardly in the picture, except for domestic consumption.