Mexico has a developing market economy that is strongly tied to that of the United States, with its major markets and sources of capital. The Mexican economy is one of the more influential in Latin America and has grown rapidly since the 1970s. However, the country’s per capita gross domestic product (GDP) remains far below that of the United States. The Mexican economy depends largely on services—including trade, transportation, finance, and government—which account for about two-thirds of GDP. Manufacturing is responsible for about one-fifth of GDP. Although nearly one-fifth of Mexican workers are employed in the agricultural sector, it accounts for only a tiny part of GDP. On the other hand, remittances from Mexican workers abroad, notably in the United States, bring billions of dollars into the economy each year.
Mexico, like other Latin American countries, has experienced a series of boom-and-bust cycles in its economic history; however, its diversified industrial and service sectors have aided economic recovery and growth. An economic crisis in the early 1980s was largely precipitated by a global fall in petroleum prices and exacerbated by high interest rates and inflation. Despite a dynamic period of growth in the early 1990s, the Mexican peso was devalued in 1994, and the country plunged into a severe, if temporary, recession. Lower- and middle-class families were particularly strained as poverty levels and unemployment increased and foreign capital left the country. The government stabilized the economy by reducing spending, instituting an economic austerity program, and accepting a controversial U.S.-sponsored bailout. Subsequent administrations continued to guide the country according to neoliberal theories. In spite of fears that manufacturing jobs were being lost to East Asian factories, at the turn of the 21st century the economy grew steadily because of rising demand for consumer goods and petroleum in the U.S. market, combined with a spike in global oil prices.