1945

In the wake of the steep devaluation of the peso in late 1994, in 1995 the Mexican economy was engulfed by what proved to be the worst crisis to hit the country in modern times. The Government launched an emergency programme whose main objective was to bring about a swiftly paced, in-depth adjustment of the external sector in order to cope with the sudden interruption of external capital inflows. Hemmed in by a severe crisis in the banking system, an extremely unstable currency and the threat of a surge in inflation, the economy shrank by nearly 7% in 1995 and might well have contracted even further had it not been for the export sector’s rapid response to the adjustment of the exchange rate. Nevertheless, with the help of a generous amount of international assistance, the authorities continued to pursue the development strategy whose implementation had begun in 1987 with the downsizing of the State, and no major changes were made in their approach.

Related Subject(s): Economic and Social Development
Countries: Mexico
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