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Problems for Mexico's consumers.

Mexico's next presidential election is still a long way off-July 2006. But press reports from the country are already previewing a bitter fight. The contest is shaping up between the current president and the former mayor of Mexico City, a populist candidate, characterized, in an October 28, 2005 Bloomberg News story by a London-based economist who is an expert on Latin American securities, as "the least market friendly" of the various candidates. The economy appears to be a major issue. Quoted also in the Bloomberg story, the problem is aptly summed up by a Mexican telecommunications executive this way: "The macroeconomy is good, but the microeconomy is bad."

The vast majority of Mexico's consumers (and voters), of course, are part of the microeconomy. They are worried about jobs for two reasons. Mexico's unemployment rate is nominally lower than that of any other Latin American country, and lower than that of the United States for that matter. But the way the unemplooyment rate is calculated-anyone who works for an hour a week is counted as employed-masks the true number, as Bloomberg News points out.

So no one really knows what the job situation really is. In such a situation economists usually talk of high "underemployment" and usually offer estimates that are little better than guesswork.

But the guesswork ends on the streets, and it is here where consumer complaints about the lack of jobs really strike home and strike fear into neighborhoods. Bloomberg correlates rising crime rates with the lack of jobs. Reports of violent crimes rose from 1.39-million in 2000 to 1.42-million in 2004 making personal safety a priority.

Against this, the current president says he does not get enough credit for getting Mexico's fiscal house in order. There can be little question that this is a prerequiste for consumer prosperity. The liberalization of credit, which has benefited consumers substantially, is also an overlooked achievement, says the current president.

Right now, though, the bad "micro" is more concrete than the abstract good "macro" for Mexico's consumers.


The population growth rate for Mexico is above the regional average, due in part to a birth rate of 23 per thousand inhabitants, which is slightly above the average of 22 per thousand for Latin America. Job creation has not kept up with growth of the labor force in recent years, and it is likely that the situation will not improve further in 2005. Officially, unemployment is running about 4.3 percent, but unofficial estimates put the number much higher.

Mexico's population reached 107-million people mid-2005, which amounted to approximately 19 percent of Latin America's 559-million inhabitants. According to data released by the Population Reference Bureau (PRB), Mexico's population will reach 129-million by 2025. Also, according to that source, Mexico is going to have a population of 139-million people in 2050.

The PRB revealed that a substantial 75 percent of Mexico's population lived in urban areas during 2005, and that the country's population density is a comparatively moderate 142 people per square mile. Another source of demographic data, the CIA's World Factbook, indicates that 31 percent of Mexico's population was birth to 14 years old in 2004, while 63 percent was 15 to 64 years old, and 6 percent of the populace was 65 years of age and over.

CIA statistics revealed that the country's population growth rate was 1.17 percent in 2005 and the According to the United Nations Population Division, in the year 2050, 19 percent of Mexico's population will be birth to 14 years old, while 57 percent will be aged 15 to 59, and 24 percent of the populace will be 60 years of age and over.
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Publication:Market Latin America
Geographic Code:1MEX
Date:Nov 1, 2005
Previous Article:Retail sales in Chile increase again.
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