Economy of Oaxaca

The state of Oaxaca is currently on the 20th position within the Mexican federation regarding economic growth and development, as it contributes 1,6% of the national Gross Domestic Product. The state's income is distributed into the Services sector which contributes with 28%; the financial and real-estate sectors with 17%; commerce, restaurants and hotels with 16%; manufacturing industries with 15%; transportation and communication industries with 9%; and finally the primary activities within the agricultural and fishing sectors which contribute 8,6%.

Agriculture in the state is mainly focused in the production of the type of agave used for the popular alcoholic drink of Mezcal, since the name of Oaxaca is closely linked to the original drink as a brand. Other products reporting important volumes nationwide include black bean and mango, followed by green pepper, sour lemon, sugar cane, peanut, melon and corn grain. The fishing industry is based mainly in the capture of red-snapper and dogfish, while the mining sector extracts sulfur.

However, the present picture has changed considerably for the large sectors of the state economy, as the social conflicts that pounded over Oaxaca during 2006 still echo and affect the health of local economy. In that year, Oaxaca grew a mere 1% , the lowest in all 32 federations, and as recent as the third quarter of 2007, projections were still somber with a low flow of tourists, little foreign investment for the short term, and specially as the essential social and economic issues of the entity have not been tackled in depth. Sadly, Oaxaca is considered as one of the state suffering severe setbacks, as well as poverty and social erosion.

 

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