The Mexican economy had its strongest performance since 2000, shown in GDP data reported late yesterday by the National Institute of Statistics, Geography and Information. Real GDP (in basic prices*) grew 1.7% in Q4, putting four-quarter growth at 4.9% and the total for 2004 at 4.4%. This was the largest increase since 6.6% in 2000.

In Q4, manufacturing and trade and tourism led the way. Manufacturing's actual growth was moderate, 0.5%, but that represented a turnaround from a decline of 0.2% in Q3. Wholesale and retail trade and restaurants and hotels together grew 4.0% in Q4, its strongest quarterly gain since Q1 2000, that is, nearly five years. Transportation and communication output rose 1.5% in the last quarter, somewhat less than Q3's 2.5%, but the four-quarter pace was a steamy 9.9%.

In recent years, the fortunes of the Mexican economy have been heavily tied to those of the United States. NAFTA is probably a contributor to that, as the correlation of the two countries' GDP trends changed toward becoming much more parallel in the early 1990s when NAFTA was enacted. In the second graph here, the linkage is illustrated by the path of exports in maquiladora industries. Receipts from tourism were also up sharply during the first three quarters of 2004. These relationships with Mexican GDP growth are not exact, but they do suggest that Mexico's economy has different and less tense reactions to exchange rates and the price of oil than other countries described here in the last few days.

Mexican data are presented in Haver's EMERGELA database. As seen in the graph, the collection includes trade through the maquiladora mechanism; employment in maquiladoras is also contained in the database.