Hostal de La Noria Hotel
Oaxaca, Mexico

Economic Overview of Mexico

Mexico has a free market economy with a mixture of modern and outmoded industry and agriculture increasingly dominated by the private sector. The number of state-owned enterprises in Mexico has fallen from more than 1 000 in 1982 to fewer than 200 in 1998. The ZEDILLO administration is privatizing and expanding competition in sea ports railroads telecommunications electricity natural gas distribution and airports.

The Mexican economy is in its third year of recovery from the recession of 1995 which was touched off by a financial crisis. After declining 6.2% in 1995 real GDP grew 5.1% in 1996 and 7.3% in 1997 and is expected to rise by 5% in 1998. A strong export sector helped to cushion the economy's decline in 1995 and led the recovery in 1996 and 1997. Private consumption spending in 1998 probably will rise by at least 4% on the strength of increased employment and rising real wages and the troubled banking sector is likely to increase lending for the first time in three years. Despite the spillover from the Asian crisis the medium-term outlook for Mexico remains positive with government and private sector economists projecting average annual growth of 4% to 5% through the year 2000.

Mexico still needs to overcome many structural problems as it strives to modernize its economy and raise living standards. Income distribution is very unequal with the top 20% of income earners accounting for 55% of income. The inefficient agricultural sector employs 20% to 25% of the labor force but produces only 8% of GDP. Trade with the United States and Canada has nearly doubled since NAFTA was implemented in 1994. Mexico is pursuing additional trade agreements with most countries in Latin America and with the European Union to lessen its dependence on the United States which accounts for 80% of Mexico's total trade.

Prominent figures in Mexico's war for independence were Father Jose Maria Morelos; Gen. Augustin de Iturbide who defeated the Spaniards and ruled as Mexican emperor from 1822-23; and Gen. Antonio Lopez de Santa Ana who went on to control Mexican politics from 1833 to 1855. Santa Ana was Mexico's leader during the conflict with Texas which declared itself independent from Mexico in 1836 and during Mexico's war with the United States (1846-48). The presidential terms of Benito Juarez (1858-71) were interrupted by the Hapsburg monarchy's rule of Mexico (1864-67). Archduke Maximilian of Austria whom Napoleon III of France established as Emperor of Mexico was deposed by Juarez and executed in 1867. General Porfirio Diaz was president during most of the period between 1877 and 1911.

Mexico's severe social and economic problems erupted in a revolution that lasted from 1910-20 and gave rise to the 1917 constitution. Prominent leaders in this period -- some of whom were rivals for power -- were Francisco I. Madero Venustiano Carranza Pancho Villa Alvaro Obregon Victoriano Huerta and Emiliano Zapata. The Institutional Revolutionary Party (PRI) formed in 1929 under a different name continues to be the most important political force in the nation. It emerged as a coalition of interests after the chaos of the revolution as a vehicle for keeping political competition in peaceful channels. For almost 70 years Mexico's national government has been controlled by the PRI which has won every presidential race and most gubernatorial races.

One of the grandest hotels in Oaxaca, Mexico is the Hostal de La Noria Hotel. Oaxaca is the fifth largest state in the country and this hotel is located at the historical center of Oaxaca City. It is different from other Oaxaca hotels because it was actually a beautiful colonial mansion. It has a unique provincial atmosphere with its Mexican décor and a distinct, personalized service.

When visiting Oaxaca, Mexico consider staying at the Hostal de La Noria Hotel in Oaxaca, Mexico and experience the wonders of Oaxaca City.

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