November 28, 2012
NAFTA may not have done much to improve Mexico’s growth rate, but its approval sure did wonders for U.S. reporting on Mexico’s economy. The Washington Post in particular has run several pieces touting Mexico’s booming economy and rising middle class (e.g here and here). In fact, a 2007 Post editorial even claimed that Mexico’s GDP had quadrupled in the years from 1988 to 2007. (The actual growth figure was 83 percent.)
The NYT appears to be getting into the act with an article discussing Mexico’s changing relationship with the U.S. as it inaugurates a new president. The article told readers:
“Mexico fell into a deep recession in 2009 when American demand for Mexican-made imports collapsed. But the recovery under President Felipe Calderón has been notable, with growth expected to reach almost 4 percent this year, roughly twice that of the United States.
While Brazil is often thought of as Latin America’s economic marvel, Mexico’s economy outpaced Brazil’s last year and is expected to do so again this year. Business that had fled Mexico in favor of China has started to return, as the wage gap narrows and transportation and other costs rise.”
A 4.0 percent growth rate is not especially rapid for developing countries. Furthermore, the fact that wages in Mexico have fallen sharply relative to wages in China is bad economic news for the vast majority of people in Mexico. Mexican workers used to be much better off than Chinese workers, the fact that this may no longer be the case is the result of Mexico’s bad economic performance.
No one would seriously change their view of the relative performance of Latin American countries based on a single year’s data. In fact, in terms of miracles, Argentina has done far better than Brazil and Mexico ranks dead last in per capita GDP growth in Latin America from 1996 to the present.
Source: International Monetary Fund.
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