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Influencing factors of the Mexican economy

What are the factors influencing the Mexican economy and what potential do they hold for possible FDIs? Important factors are listed and structured below in internal and external categories of the SWOT analysis.

Internal factors

Strengths

  • Proximity and customs-free access to the US market
  • Open trade model with USD 760 billion in trade volume (twice as much as Brazil, the largest economy in Latin America)
  • Competitive export economy
  • 46 free trade agreements
  • Industrial structure is given
  • Large domestic market

Weaknesses

  • Dependence on US market (in 2016: 80% of export volume for USA)
  • Huge informal sector (55% of employees)
  • Corruption

 

External factors

Opportunities

  • Forecast for 2018: 4 million cars produced (rank 7 of the world’s car manufacturers)
  • Free Trade Agreements with South America and Pacific States
  • Many projects of transport infrastructure
  • Liberalization of electricity and oil industries
  • More competitiveness as an export platform
  • Improvement of the country image

Risks

  • Trade barriers by the US
  • Economic downturn in the US
  • Exchange loss
  • Persistently low oil price
  • Security situation
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