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April 26, 2019 0 Comment

2.0 GDP Growth Rate between the United States and Mexico

US GDP GROWTH RATE

MEXICO GDP GROWTH RATE
As the main economic indicator for measuring economic output within a given country. GDP aims to quantify – for a given country and year – the total value of “wealth production” made by economic agents residing within this territory, GDP reflects the domestic economic activity of a country and the change in GDP from one period to another is supposed to measure its rate of economic growth. GDP is the most used indicator for measuring growth and making international comparisons. It even plays a particularly important role in measuring the deficits and public debts of states, which has a direct impact on the economic policies of governments and the decisions of central banks. The GDP growth rate is determined by the four components of GDP. GDP growth is personal consumption. This includes the critical area of retail sales. The second element is business investment, including levels of construction and inventory. Public spending is the third growth factor. Its main categories are social security benefits, defense and health insurance benefits. The government often jumps into the economy during a recession. Fourth, net trade. Exports add to GDP while imports are subtracted.

In the United States the main sector that contributes to the gross domestic production is the tertiary sector. Service providing cover 80.2% the GDP, followed by the Secondary Sector. Industrial Sector covers itself 18.9% of the GDP (GDP_ Composition by Sector of Origin. Central Intelligence Agency World Fact book, 2017).
In Mexico, The main sector that contributes to the Gross Domestic Production is also the Services which cover 59.8% of the GDP (The World Fact Book, 2013).
In economics, a service is a transaction in which no physical good is transferred from the seller to the buyer. The benefits of such a service are demonstrated by the willingness of the buyer to proceed with the exchange. Public services are those paid by society (nation-state, fiscal union, region). With resources, skills, ingenuity and experience, service providers benefit consumers of services.
Based on the above diagram, GDP growth rate of the United States was around 2.9% in 2015 because of the Trans-Pacific Partnership which is a free trade agreement between the US and 11 other countries that border the Pacific Ocean and also the Iran Nuclear Deal who contributed also to the GDP. But the gross domestic production drops to 1.5% in 2016 because of the new government which comes with new economic policies. In 2017, the GDP growth rate is growing to 2.2% because of Trump Tax Act. There has been a clear impact on the stock market.
Mexico GDP growth Rate was around 3.3% in 2015 due to a faster growth in wholesale trade, retail trade, real estate activities, financial services, Insurance and transportation. In 2017, the GDP growth rate dropped to 2.0% because of less industrial activity linked to the United States and also by the depreciation of the Peso (Mexican Money).