When the American economy was growing, successive Mexican governments counted on foreign investment and exports to generate growth. Exports account for almost a third of Mexico’s gross domestic product. But more than 80 percent of them go to the U.S., and when Americans stop buying, there is no market for Mexican-made goods.
Mexico is credited by economists with economic policies that reduced debt and tamed inflation, but that has not saved it from the pain of a global recession.
The effect on Mexico is becoming clear. Unemployment is at the highest level in eight years. The peso has fallen 25 percent, leading to a spike in the price of imports, hurting consumers and businesses that rely on imported goods. Exports, industrial production and retail sales have all fallen in the last few months.
