For a number of nations that imports most of its oil supplies, increasing oil prices becomes another burden for them and their economies that are already ailing. For the oil exporters, however, this may be the sign of an economic recovery because increased oil prices mean increased revenue.Such is the case for Mexico, where rising oil prices and increased exports may have been helping the country's economy recover from the slump and start growing once again, according to national leaders and experts. The financial system, however, still has some fundamental issues to solve.
According to Deputy Finance Minister Alejandro Werner, the economy is expected to grow by 3 percent in 2010, a rebound from a 7.5 percent contraction this year. This quarter alone, the economy already grew 2.9 percent in the three-quarter period. Unfin 2008.
Despite all of these good news, however, economists say that there is still a lot of work to do if Mexico does not want to happen this again. Major overhauls are needed in the financial sector, the experts added. Monopolies and a tight-budget spending plan is also killing the economy's efforts to grow further.
While the rest of the developed world got hit in as early as 2008, Mexico's economy got its own damage in 2009. A slump in the United States means that country will stop buying from anywhere--including Mexico, which exports 80 percent of its goods to the US.
Still, Mexico is still in good track to recovery. There have been some improvements in the banking system and economic policy-making. Hedging oil prices also proved to be well for Mexico as it is one of the nation's major exports. More coordination was also present and proved to be a key contributor to the recovery. Probably reducing dependence on the US economy might also do good for North American country.
