ERNESTO CORDERO

ECONOMIC OUTLOOK AND FUTURE AGENDA

June 2012

2

Economic Growth

Belgium

United Kingdom

Norway

Canada

Turkey

South Africa

Australia

Mexico

Argentina

Colombia

India

0 1 2 3 4 5 6 7 8 9

0.010.5

0.80.9

1.82.02.12.1

2.32.3

2.73.03.0

3.53.6

4.04.24.3

4.75.5

6.98.2

Growth Forecast 2012 (Percent change of constant

prices)

Percent

Average: 3.1

2007 2008 2009 2010 2011

-8

-6

-4

-2

0

2

4

6

8

Gross Domestic Product, Constant Prices

(Percent Change)

Source: IMF

3

Job CreationE

spa

ña

EE

UU

Ca

na

dá

Arg

en

tina

Ch

ile

Bra

sil

Ale

ma

nia

Mé

xico

0

5

10

15

20

25

20.7

9.17.6 7.3 7.2 6.7 6.0

4.5

Unemployment Rate, 2011(%)

20

05

J A J O2

00

6 J A J O

20

07

J A J O2

00

8 J A J O

20

09

J A J O2

01

0 J A J O

20

11

J A J O2

01

2 J A

12.5

13.0

13.5

14.0

14.5

15.0

15.5

16.0

Workers registered at IMSS(Millions)

Original Adjustment

Source: IMF, estimates Source: IMSS

4

Economic Stability

Total Deficit, 2010

(% of GDP) International Reserves(billion dollars)

Source: S&P (December 2010), SHCP México

Méx

ico

Pro

med

io B

BB

Lit

uan

ia

Hu

ng

ría

Tú

nez

Bu

lgar

ia

Per

ú

Pro

med

io o

tro

s

Esp

aña

Gre

cia

Ru

man

ia

0

2

4

6

8

10

12

14

32.0

707580859095

100105110115120125130135140145150

Ja

n-0

8A

pr-

08

Ju

l-0

8O

ct-

08

Ja

n-0

9A

pr-

09

Ju

l-0

9O

ct-

09

Ja

n-1

0A

pr-

10

Ju

l-1

0O

ct-

10

Ja

n-1

1A

pr-

11J

ul-

11O

ct-

11J

an

-12

5

Internal Market

Brasil

Argentina

Uruguay

México

Colombia

Perú

Chile

Singapur

126

113

90

53

42

41

39

1

Ranking 2012 Doing Business

Source: Doing Business

60

65

70

75

80

85

90

95

100

105

Mexico's Real Gross Domestic Product Index vs

US Industrial Production Index(Index 2007 = 100)

GDP Index (MEX)

Industrial Production Index (US)

Source: IMF, World Economic Outlook database, April, 2012

6

Exports

Non-oil exports have increased since 1993. Non-oil exports have recovered from the recent crisis and in 2011 registered

14.2% annual growth.

Ene 93Abr 95 Jul 97 Oct 99Ene 02Abr 04 Jul 06 Oct 08Ene 110

5,000

10,000

15,000

20,000

25,000

30,000

Non-Oil Exports(monthly, adjusted, million dollars)  

México is the most competitive country in auto parts manufacturing (KPMG).

One out of 7 cars circulating in the US is manufactured in México

The Mexican aerospace industry occupies the first place in

manufacturing investment in the world (Deloitte).

México is the biggest producer of television sets (International Trade Center) and the third biggest producer of smart phones (Global Trade Atlas).

Source: INEGI

7

Exports (2)

Argentina Brazil Chile Colombia Mexico Peru0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

5% 1% 2%8%

3%

25%

45%47%

36%

60%

16%

45%

50% 52%

62%

33%

81%

30%

Other Transactions Primary Products Manufactures

Total Goods Exports for Selected Latin American Countries in 2010

(%)

Source: Economic Commission for Latin America

Argentina Brazil Chile Colombia Mexico Peru0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

21% 21%

55%

15%

9%

24%

4% 6%

2%

7%

9%

6%

22% 19%

5%

10%

37%

3%5%

26%

Natural Resource-Based Low-Tech Medium-Tech High-Tech

Manufactured Goods Exports for Selected Latin American Countries in 2010

(%)

Source: Economic Commission for Latin America

8

Health Coverage1

98

0

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

12

46%

57%60%

67%

81%

100%Health Coverage

(%)

Source: Done by the Rafael Preciado Hernández Foundation with data from Secretaría de Salud.

9

Well-being

2000 2002 2004 2006 20080

2

4

6

8

10

12

14

16 15

13

8

5 5

Poverty(% of population less than 2

dlls)

2008 20108.0

9.0

10.0

11.0

10.6

10.4

Extreme Poverty(%)

Source: World Bank, World dataBank Source: Coneval "Pobreza en México y en las Entidades Federativas 2008-2011", Slide106

10

Well-being

India China Brasil México Rusia0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

3,944

9,143

12,181

15,178

17,691

GDP per Capita PPP 2012(Dlls)

0.30

0.40

0.50

0.60

0.70

0.80

1990 2000 2005 2009 2010 2011

Índice de Desarrollo HumanoHuman Development Index 2011

Chile,

Mexico

Russia

Brazil

China

India

Source: IMF, World Economic Outlook Database, Abril 2012 Source:UNDP

11

Sustainability and Inclusive Growth

Global Deceleration

US Exports Markets Diversification and Domestic Market

Europe Banking Supervision, System of Payments, & Debt Mkts

Structural Transformation

Competitiveness Labour, Energy, Telecomm, Consumers …

Political Reform Reelection, Legislative Reduction, Ratification, Second Round, ...

Federalism Revenues, Health, Education, Security, Accountability, …

Rule of Law Legal Certainty, Justice Procurement, Corruption, Enforcement, …

12

Sustainability and Inclusive Growth

Structural TransformationsMore Revenues used Effectively, Efficiently and Transparently

Poverty and

Inequality Reduction

Cash Conditional

Transfer Programmes

Social Safety Net

Education

Broader Coverage

Improve Quality

Productivity

Infrastructure

Transport

Energy

Telecomm

Innovation

Tech Intensive

R&D

Agencies and

Funds

Financial Markets

SMEs

Capital Markets

Commercial and

Development Bank

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