According to Bloomberg Business Week:
The government says Mexico's economy grew 7.6 percent in the second quarter of 2010 compared to the previous year's quarter, the largest jump since the 2009 global economic crisis plunged the country into recession.
The National Institute for Statistics and Geography reports that the gross domestic product increase was driven mostly by a 7.8 percent growth in the industrial sector.
The institute reports Friday that the rebound also came from a 7.4 percent increase in services and 4.8 percent climb in the agricultural sector.
The country saw a big jump in sales of automotive products to the United States, analysts say.
Mexico had a GDP drop of 6.5 percent in 2009, its largest in decades.
This puts Mexico in the lead in Latin America in terms of foreign investment. But only for the moment. International Business News sees see this burst of energy as temporary, partly because Mexico's economy remains so entwined with that of the US, and the US isn't doing so well.
Even more important, the growth was in areas that have little to do with improving the lives of ordinary Mexicans, just as whatever recovery is touted in the US doesn't seem to reach ordinary Americans. Agricultural expansion tends to be industrial agriculture expansion meaning fewer jobs and more food and environmental degradation. Similarly, an underlying issue for all of Latin America is that it continues to expand extractive industries, or industries that benefit the countries it exports to more than it helps the exporting countries.
In Mexico, inflation continues to be a significant problem for ordinary people, with the government maintaining low interest rates to continue to encourage foreign investment. For instance, while inflation in August was low, it was expected to start rising, possibly to an annual rate of over 5% for the year, and though supposed to settle into a 4.5% rate, this is really tough for people who already can't make their income go far enough. Other Latin American countries, including Brazil, which is doing better than Mexico in terms of growth rate, are raising interest rates to control inflation. Mexico, under Calderón, is sticking to its US Republican business model.
The whole Washington Consensus macroeconomic model driving growth in Mexico and still in much of Latin America though not as much as in Mexico, is a rickety, unstable model at best. In a new book, The Dragon in the Room, Kevin P. Gallagher and Roberto Porzenkanski arguethat China's road to globalization, one that emphasizes gradualism and coordinated macro-economic and industrial policies, is far superior to the Washington Consensus route taken by most Latin American nations, particularly Mexico." Download this PDF for a brief summary of Gallager's arguments.
I wrote some blog posts giving basic explanations of economics sometime ago (on another blog and in another lifetime!). They may help you understand something of the way economics work. You can check here and here for starters.