MEXICO

As Mexico gains more global influence, its economy is starting to look more like that of a fully developed country. The greatest progress has come in controlling inflation, which is projected to fall below 10% next year. Mexico's low unemployment rate may be somewhat misleading, since almost anybody who works any hours at all may be counted as employed. Nevertheless, the current rate represents a significant change from the highs of over 6% that followed the financial crisis in 1994. One blot on Mexico's record is its trade balance. The deficits projected for 2000 and 2001 are particularly dramatic given the boost to the value of exports that has come from rising oil prices. With the activation on July 1st of the EU-Mexico Free Trade Agreement, Mexico's consumers might further raise imports. Last year, only 9% of Mexico's imports came from the European Union. The trade balance may not be the only problem Mexico shares with its northern neighbour; a first-quarter surge in the industrial sector has led to concerns about the economy overheating.