Prospects for Growth and the Environment in Mexico in the 1990s

This paper reviews the economic reform process in Mexico since the mid-1980s and its association with disappointing growth. The sluggishness is linked to a deterioration of the current account vs. growth tradeoff and unsatisfactory productivity growth and capital formation. Real currency appreciation and declining savings figured in these developments. Social and environmental sustainability will require faster growth in the future. Appropriate policy changes could move the economy toward a higher growth path while addressing its major environmental problems