Mexican Sub-National Growth

Viridinia Rios posted an interesting map of economic growth across states in Mexico in the last year.  Click on the map to make it more readable, but some of the most interesting parts I think are that:


1.  Much of the country is in red, which indicates negative to barely positive economic growth of between -14.4% and 0.4%.  I don’t know enough about Campeche to know why the income fell by more than 14% there last year.  Anyone have an idea?

2. There are states that grew quite fast,including several near the US border.  Despite the economic fallout of the drug war, those states still posted really good numbers.

3. I’m curious how Baja Sur and Quintana Roo grew so quickly, especially with the latter being so close to Campeche.  Most of what I read looks at Mexican aggregate conditions, so this is really interesting to see a state-by-state breakdown of what is going on.  It also makes me realize that I don’t have a good understanding of some of the complexities of the regional economies in Mexico.


5 thoughts on “Mexican Sub-National Growth

  1. At present, an estimated 90% of Quintana Roo’s GDP is derived from the tourism industry. Data from ASUR, the publicly traded operator of Cancun’s international airport shows a year-on-year 10.4% increase in arrivals from 2012 to 2013. Similarly, Los Cabos airport in Baja Sur saw a 15.5% rise over the same period. Since both states primarily serve international tourists, who predominantly arrive by air, I don’t think it’s a big jump to think that those numbers are behind the growth figures for each state.

    Click to access ASUR-Airports-Investor-Relations-Presentation-April-2014.pdf

    Campeche has little to no tourism and is heavily reliant on the oil & gas industry (52% of state GDP), which means PEMEX. I haven’t delved into the figures, but imagine you could check production statistics for the area that could explain the drop (which would be in line with generally declining PEMEX production figures).

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  3. Quintana Roo’s economy is almost entirely due to activity on the east coast in the Cozumel, Tulum, and Cancún tourist zones. Campeche’s economy consists of offshore oil fields west of its land mass. The inner Yucatan peninsula is still wild jungle. The two states appear to border each other, but economically they are hundreds of miles apart.

    Incidentally, the old walled town of Campeche with its narrow streets is worth a visit and the caves and Maya archeological sites in the jungle parts of Campeche fascinated me. Quintana Roo is mostly for shallow drinking fests. Therefor the tourism is actually much better in Campeche.

    The Cantarell and oil field is in decline. It was once the second biggest producer in the world after Ghawar in the bin Saud dictatorship. Since that decline is accounted for in the Campeche GDP — even though the offshore income doesn’t affect Campeche workers or living standards — I expect that is the source of the falling figures. The actual base of operations and shipping for Cantarell and Ku Maloob Zaap oil is mostly in Tabasco.

    The growth in border states may have to do with the Broken Window Fallacy (q.v.). Regions with war and heavy crime problems are usually considered to have rising GDP as a result. That is one of the oft-quoted problems with GDP as a measure of economic activity.

    Strong growth in Querétaro and Guanajuato is apparently due to expanding industrial base. Many reports say that wages are climbing steadily and unemployment is very low.

  4. Thanks Marc and Brian, I really appreciate your insights. What you wrote makes a lot of sense and I think probably explains a lot of what the numbers showed last year.

  5. An interesting alternate view would be to use a map based on the populations of the states. This makes it look like most of Mexico is suffering from low growth (and by implication most Mexicans aren’t improving their lot) but I don’t know the population density of the low growth areas vs high growth (other than that Mexico City has a very high population and density).

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