What forms Mexico’s Gross Domestic Product?

Gross Domestic Product (GDP) is the total monetary value of the production of goods and services of a country during a certain lapse of time (generally measured within a trimester or year). The GDP only takes into consideration the goods and services produced during the time lapse and don’t include goods and services produced by informal commerce (domestic work, exchange between acquaintances, etc.) GDP is the sum of all goods and services produced by a country and is the most important method to estimate the production capacity of an economy. GDP per capita (also known as income per capita) measures the available material wealth by dividing the total GDP between the country’s inhabitants. GDP is frequently used to measure the material wellbeing of a society, for which it is politically used as an indicator for the efficiency of applied policies. The three main economic sectors that form Mexico’s GDP are: Primary Sector: extraction activity of agriculture, livestock, forestry, hunting, fishing and mining. Secondary Sector: industrial transformation activity also includes construction. Tertiary Sector: services, including the production of energy, communication and water. In Mexico, the services sector is the greatest component of the GDP, followed by the industrial sector and the agricultural last. Of the work force, it is estimated that 18% is employed in agriculture, 24% in industry and 58% in the services sector. The manufacturing industry, despite its importance in national production, has faced a critical situation during the last years due to the increase of competitors, intensified because it competes against countries with different work and environmental regulations and government support. In 2007 Mexico had the 15th place among 182 nations, measured by the size of its Gross Domestic Product, benefited by the high oil prices and for being the place where the world’s third richest man lives. According to the International Monetary Fund, Mexico was the world’s 15th economy, with a GDP of 840 thousand 709 million dollars. The place reflects a loss of position compared to 2006, when it was in place number 14, with 811 thousand 282 million dollars. This data shows that the Mexican economy has achieved to increase the value of its goods and services produced in a year, only at a lower rate than other nations, which explains the lower place. Artículo Producido por el Equipo Editorial Explorando México. Copyright Explorando México, todos los Derechos Reservados. Foto: Wikipedia