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Energy
SHCP: June Oil Exports Down 13% On Year At 1.24 Million B/D
July 24, 2009
According to the Finance and Public Credit Ministry (SHCP), Mexico’s crude oil exports fell 13% on year in June to
1.24 million barrels per day (b/d) as domestic production continues to slide. While down on year, June exports were
the highest since February and 6% higher than the 1.17 million b/d Pemex exported in May. Pemex is expected to
release June production data later in July.
Pemex Awards USD 159 Million Drilling Contract To Halliburton
July 23, 2009
Pemex announced it awarded U.S. oil services provider Halliburton a USD 159 million contract to drill 170 wells in the
Chicontepec oil basin, marking the Houston-based company's debut in an area where its main competitors have an
established presence. Pemex said the contract will last three years and involve four drilling rigs. Halliburton's
competitors Schlumberger and Weatherford International each won 500-well contracts for Chicontepec in March.
Pemex did not specify who will provide Halliburton with the rigs.
CICSA Secures USD 135 Million Contract From Pemex
July 23, 2009
Mexican billionaire Carlos Slim's construction company Carso Infraestructura y Construccion (CICSA) announced it
was awarded a two-year, USD 135 million contract to drill wells at the Chicontepec oil basin. CICSA specified that the
drilling projects were awarded to its Servicios Integrales GSM and Operadora CICSA subsidiaries.
Pemex To Award Refinery Project To First State Securing Land For Construction
July 24, 2009
Pemex said that it will award the USD 9 billion refinery project to the state that succeeds first in securing the required
land for the construction of the facility. Earlier this year Pemex gave the state of Hidalgo three months to purchase
enough land to build the refinery, but the state missed the deadline. Guanajuato now has a chance to win the project
if it buys enough rural land first. Red tape related to land titles forced Hidalgo to miss the deadline. Both Hidalgo and
Guanajuato are in central Mexico and have existing refineries. The state that does not win the new refinery will have
its existing one expanded.
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Mining
GMex's Profit Falls 47% In 2Q
July 23, 2009
Mexican miner Grupo Mexico (GMex) reported that its profit for 2Q tumbled 47% on slumping demand and falling
copper prices. Net income for GMex dropped to USD 238.2 million, or USD 0.31 per share. In the same quarter last
year, the firm reported net income of USD 451 million, or USD 0.59 cents a share. In 1Q 2009 GMex said it paused all
of its investment projects due to "weakened commodity prices and economic uncertainties." In 2Q, output of copper
edged up 1.7% to 119,277 metric tons.
Mexico’s Gold Production To Reach Highest Figure On Record In Last 100 Years
July 23, 2009
According to Mexico’s Mining Chamber (CAMIMEX) and the Ministry of Economy (SE), the country’s gold production
during 2009 should amount to approximately 70 tons, the highest figure on record for the last 100 years. CAMIMEX
said earlier this year that the mining industry had started to recover from drops in nearly all metals’ prices due to the
global economic downturn. CAMIMEX said that Mexican gold had been trading at an average USD 900 per ounce,
and estimated that Mexico could become one of the world’s top 5 gold producers in the next two years.
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Trade & Investment
INEGI: Mexico Trade Deficit At USD 206 Million In June
July 23, 2009
According to the National Statistics Institute (INEGI), Mexico registered an unexpected trade deficit in June in what
was seen as a sign that the economy may have hit bottom. After three straight months of trade surpluses, INEGI said
that Mexico tallied a USD 206 million deficit in June. Last month’s exports fell 26.6% from the year-ago period to USD
19.36 billion, while imports sank 25.1% to USD 19.57 billion. Imports in the first six months of 2009 were 31% lower
than in the year-ago period, at USD 105.52 billion, while exports were down 30% at USD 104.31 billion.
INEGI: Fixed Investment In Mexico Keeps Declining Sharply
July 23, 2009
According to the National Statistics Institute (INEGI), fixed investment in Mexico fell 17.8% in April at annual rates as
a sharp decline in equipment and machinery purchases affected the figure. INEGI noted that expenditures in the
mentioned sector contracted by 30.2% at annual rates in April, representing the worst drop registered in national
investments since the 1995 crisis.
Mexico Becomes Second-Largest Wool Suits, Textiles Exporter To The U.S.
July 21, 2009
Experts and sources from Mexico’s woolen textiles’ industry said that their business has not been affected as harshly
as other textile specialties by the current economic downturn, as their exports of suits to the U.S. have increased by
16% during the first five months of the year. Figures from Mexican wool suits manufacturers indicate that they have
become the second most important exporters to the U.S. of the said goods. Exports of textiles containing wool
amounted to USD 26.6 million in the first five months of the year, above the USD 23.7 million of the like Chinese
exports.
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Banking, Insurance & Finance
Banxico Sets Restrictions On Bank Commissions
July 21, 2009
The Bank of Mexico (Banxico) announced it is placing new restrictions on fees and commissions that commercial
banks can charge customers as it seeks to improve competition and protect users of financial services. Banxico ruled
that as of August 21, banks will no longer be able to charge customers if checks they deposit in their accounts are
bounced for any reason. The ban includes commissions on accounts required as a condition for a bank granting a
loan, as well as commissions for overdrawing or attempting to overdraw on a debit card. Banks also will be prohibited
from charging customers a double commission—for handling an account and failing to meet minimum balances—for
the same period. Also to be disallowed are commissions for closing a deposit account, canceling credit or debit cards,
or canceling online banking service.
IFC To Take Stake In Banorte Banking Unit
July 23, 2009
Mexican banking concern Grupo Financiero Banorte announced that the International Finance Corporation (IFC), an
arm of the World Bank (WB), plans to invest capital in its banking unit Banco Mercantil del Norte. Banorte said its
board approved the investment by IFC, which will become a strategic partner. Banorte, Mexico's sole major
commercial bank that is not foreign-owned, said the operation still requires approval of the IFC board of directors and
Mexican authorities.
Microfinance Bank Compartamos Sells MXN 500 Million In Bonds
July 20, 2009
Mexican microfinance bank Banco Compartamos announced that it sold MXN 500 million in bonds on the local debt
market. Compartamos said the three-year bonds were placed at a yield of 200 basis points over the benchmark TIIE
interbank lending rate, which stood at 4.845%. Compartamos also reported a MXN 327 million net income during 2Q,
a 31% increase when compared to the like 2008 period.
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Business & Industry
Gruma Obtains Extension On Derivatives Debt Deadline
July 22, 2009
Mexican corn flour and tortilla maker Gruma said the counterparties it owes USD 726.6 million from contracts
involving foreign-exchange derivatives have extended the deadline to reach a repayment agreement. The company said it continues to negotiate with its creditors to swap its derivatives liabilities into loans. Gruma said it expects to
seek another extension soon and added that a repayment plan hinges on it refinancing debt under a five-year
revolving credit line with Spanish-Mexican bank BBVA Bancomer, and loans for MXN 3.37 billion with trade finance
development bank Bancomext.
Grupo Kuo Seeks To Become Aerospace Supplier
July 21, 2009
Mexican conglomerate Grupo Kuo said it has set up a unit to enter and supply the aerospace industry. Grupo Kuo
said its KUO Aerospace subsidiary hopes to obtain certification by the end of 1Q 2010 as a first step toward
becoming a supplier to the industry. Grupo Kuo, which has operations in chemicals, auto parts, and processed foods,
did not provide further details of its plans. Mexico has been growing as a location for the aerospace industry, and the
Ministry of Economy (SE) said the industry has been growing strongly in the past five years, employing 27,000 people
in 2009, compared with 7,500 in 2004, and had exports worth USD 3.1 billion in 2008, compared with USD 1.3 billion
in 2004.
U.S. Otexa: Mexican Denim Exports To The U.S. Surpass China’s
July 24, 2009
According to the U.S. Office of Textiles and Apparel (Otexa), Mexican denim exports to the U.S. have surpassed
Chinese competitors’ shipments to the U.S. due to better competitive advantages offered by Mexican producers as
well as by favorable currency trends following the depreciation of Mexico’s peso (MXN). According to Otexa, Mexico
sold the U.S. as much as USD 5.3 million worth of denim, while Chinese peers’ exports amounted to USD 5.2 million.
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Automotive
Government Lends MXN 15 Billion To Automotive Companies
July 20, 2009
President Calderon announced that his government has lent more than MXN 15 billion to help automotive companies
this year. Calderon said the government has structured loans up to MXN 27 billion in favor of auto parts factories,
finishing plants, dealers, and auto finance companies. In addition, President Calderon had announced details of a car
ownership renewal program earlier this month. Calderon also said that the government had spent MXN 560 million
protecting around 220,000 auto workers' jobs under the Job Preservation Program that was announced in March.
Volkswagen: Mexico Production To Fall 30% In 2009
July 20, 2009
German automaker Volkswagen said it expects Mexico automobile production to fall a worse-than-expected 30% this
year due to the global recession. Volkswagen is operating at partial capacity at its factory in Puebla, in the state of the
same name, which is currently its only plant in North America. The factory posted record output of more than 450,000
cars in 2008, but has been partially or fully idled several times this year as the company faces lower Mexico and
global vehicle demand. Volkswagen recently announced it would invest USD 1 billion in the facility, of which USD 410
million would be destined to expand the plant and the rest to modernize existing production lines and develop and
produce a new model.
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Construction & Infrastructure
ICA’s Net Profit Up 422% In 2Q 2009
July 24, 2009
Mexican construction company Ingenieros Civiles y Asociados (ICA) announced its 2Q net profit soared 422%, sales
were up 48%, and operational profit increased by 118%. The firm specified that civil construction projects contributed
the most to the results, while government contracts and industrial construction projects also helped boost its profit.
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Telecommunications & Technology
CFC: Airwaves Auction Planned This Year
July 21, 2009
The Federal Competition Commission (CFC) announced that Mexico will license new airwaves this year to promote
more competition in the cell phone industry, dominated by local firm America Movil. The CFC said it will decide this
month on the rules for the spectrum sale. The government aims to sell the airwaves to at least one new competitor in
the wireless market, where America Movil has a 72% share. The winning bidders will get spectrum suitable for voice,
video, and high-speed data transmission over third-generation (3G) networks.
Telmex Holds Capex Plans Steady On Stagnant Economy
July 23, 2009
Telmex said it is sticking to its MXN 8 billion capital expenditure (capex) plan for this year, even after spending more
than half in the first six months, and added it has not seen any positive economic signals to warrant a change in its
investment plans. Telmex is expected to report a 2.9% rise in 2Q net profit as foreign-exchange gains compensate for
declining sales and cash flow. Telmex’s sales fell 4% during 2Q and it lost 99,000 lines, as clients either cancelled
their contracts or changed their fixed telephony provider.
Samsung Enters Laptop Market, Begins Selling Netbooks
July 21, 2009
South Korean electronics manufacturer Samsung announced it will start selling netbook and notebook laptops in
Mexico starting in August, competing with other companies and with local mobile phone provider Telcel, which
recently entered the computer market and announced a strategic partnership with local PC manufacturer Lanix. Other
players in the portable PC market in Mexico are HP and Acer.
America Movil To Center Expansion Strategy On Internet, 3G Services
July 22, 2009
Executives from Mexican mobile telephony operator America Movil said that the firm’s expansion strategy will be
centered on Internet and third-generation (3G) networks, and that it will strengthen its post-paid telephony segment.
America Movil said it will apply that growth plan to its Mexican unit Telcel and to its other subsidiaries in Latin
America. America Movil said that broadband services’ users have been increasing an average 45% at annual rates.
America Movil 2Q Net Up 28% To MXN 22.5 Billion; Capex Seen At USD 3 Billion
July 21, 2009
Mexican mobile telephony operator America Movil said that its net profit jumped 28% in 2Q due to higher sales and
hefty foreign exchange gains. Net profit rose to MXN 22.5 billion, or MXN 0.69 per local L share, from MXN 17.7
billion, or MXN 0.51 per share, in 2Q of 2008. Sales grew 11% year-on-year to MXN 94 billion as a 16% increase in
service revenue led by uptake of data services offset a 17% decline in equipment sales as a result of slower
subscriber growth and lower handset prices. EBITDA rose 13% to MXN 39.3 billion. America Movil also said it will
probably invest USD 3 billion in its operations next year, depending on the uptake of data services by its clients.
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Media & Entertainment
SCT Awards 50 New Cable TV Concessions
July 23, 2009
The Communications and Transport Ministry (SCT) announced that it has awarded 50 new cable TV concessions for
operators in the states of Yucatan, Campeche, Guanajuato, Hidalgo, Veracruz, Chiapas, and Michoacan. SCT added
that it authorized three new concessions for satellite services and changes for two existing ones, broadening the
number of providers of data transmission, radio communications, vehicles’ tracking, and mobile maritime services.
Televisa To Launch New Sports Channel, To Compete With ESPN, Fox Sports
July 22, 2009
Mexican media conglomerate Grupo Televisa announced that it will launch its new Televisa Deportes Networks
(TDN) sports channel in August in order to better compete with rivals such as ESPN and Fox Sports. Televisa said a
decline in open television sales has led it to focus on its pay TV segment with new content and through its new TDN
channel.
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Economy
President Calderon: GDP May Have Shrunk By 9% Or More In 1H 2009
July 24, 2009
President Calderon said that "it is estimated that the year-on-year drop in the economy in the first half of the year
could have been 9% or more." GDP sank 8.2% in the first quarter of 2009 amid a steep decline in trade with the U.S.,
where Mexico sends 80% of its exports, and a deep industrial recession. An even bigger year-on-year drop is
expected in the second quarter. Output in the April-June period was negatively affected by the Easter holiday, as well
as a local outbreak of A/H1N1 influenza that scared tourists away and prompted the government to take measures to
contain the virus.
SHCP To Cut 2009 Spending By MXN 85 Billion On Recession, Oil Price
July 23, 2009
The Finance and Public Credit Ministry (SHCP) said it will cut planned spending this year by MXN 85 billion to MXN
2.235 trillion as a recession and low oil prices crimp federal revenue. SHCP said the government faces a revenue
shortfall of MXN 421 billion, which can only partially be covered by MXN 336 billion in nonrecurring sources of
revenue, including oil hedges and budget stabilization funds. SHCP said the government had already made MXN 35 billion of the budget cuts and that another MXN 50 billion are on the way.
SHCP Announces Tax Reforms Proposal
July 23, 2009
The Finance and Public Credit Ministry (SHCP) said it will propose a tax reform package to boost the government's
non-oil revenues when it sends the proposed 2010 budget to Congress. SHCP said it is still working on specific
proposals for the tax reform and did not provide additional details of the plan, but noted that adjustments will be made
mostly in the sectors with the largest effects on contributions and which are less costly for production and society.
Meanwhile, legislators from the Institutional Revolutionary Party (PRI), which won the majority in Congress for the
following term, demanded that SHCP choose between two currently applicable taxes and added they won’t allow the
IETU (minimum flat tax) and ISR (income) taxes to be applied simultaneously in these times of crisis.
SHCP: Mexico’s Country Risk Falls To 212 Basis Points
July 20, 2009
The Finance and Public Credit Ministry (SHCP) said that Mexico’s country risk indicator fell 62 basis points (BP) to
212 BP on July 17, while it stood at 274 BP on July 10. The country risk measures an emerging state’s public debt
yield with regard to the U.S.’s, which is considered "risk free."
INEGI: Household Income To Continue Slide In 2009
July 20, 2009
According to a biennial survey carried out by the National Statistics Institute (INEGI) in the second half of last year,
Mexican households reported an average quarterly income in 2008 of MXN 36,694, down 1.6% from 2006. INEGI
said the decline probably accelerated this year amid the recession, which is the country's deepest since 1995.
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Border & Migration
Number Of Mexican Immigrants To The U.S. Declines To Lowest In Decades
July 22, 2009
According to a report by the Pew Hispanic Center and data from the U.S. Border Patrol, there has been a continued
decrease in immigration from Mexico since 2006. The number of Mexican immigrants arriving in the U.S. fell to
175,000 in the period from March 2008 to March 2009, down 59% from a year earlier, indicating that the U.S.
recession is affecting the number of job seekers heading north. The arrivals figure was the lowest in 10 years. The
figures also indicate that last year 433,000 people returned to Mexico, compared with 479,000 two years earlier.
Although the report focused only on Mexicans, an October Pew report showed the number of illegal immigrants from
other Latin American countries in the U.S. has also decreased.
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Politics
Poll: Image Of U.S. Improves Dramatically In Mexico
July 24, 2009
According to the Pew Global Attitudes Project's newly released survey on international attitudes toward the U.S., the
favorable image of the United States has soared in Mexico from 47% to 69% since Barack Obama replaced George
W. Bush as president. A year ago only 16% of Mexicans said they trusted the U.S. to do what's right in international
affairs. This year 55% of Mexicans had faith in American foreign policy.
Cesar Nava, Sole Candidate For PAN’s Leadership
July 25, 2009
Mexican politician and former secretary for President Calderon Cesar Nava is the only candidate to preside the ruling
National Action Party’s (PAN) leadership after Ernesto Ruffo Appel declined to submit his candidacy for the post.
Nava must earn at least 66% of the votes to obtain the party’s presidency. The situation and support of Calderon for
Nava’s candidacy have led to differences within the party and a fracture among its members. Nava’s opponents said
that they will seek to lobby with PAN’s counselors to ensure the candidate won’t secure the necessary votes.
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Justice, Safety & Crime
Officials, Experts: Mexican Drug Cartels Expand Abroad
July 22, 2009
According to security experts, Mexican drug traffickers are expanding their operations as never before and have a
presence in 47 nations, including the U.S., Guatemala, and Colombia. The expansion comes amid the military
crackdown in Mexico and the arrests of major Colombian suppliers, posing a new challenge for efforts to stop the flow of drugs into the U.S. Officials and experts found that the Mexican mobs increasingly buy directly from the cocaineproducing
Andes and have begun using countries as distant as Argentina to obtain the raw material for
methamphetamine. Mexican gangsters have been arrested as far away as Malaysia as they seek new markets for
cocaine and "meth" supply sources.
U.S. Departments Launch Drive Against Gulf Drug Cartel
July 21, 2009
The U.S. Departments of State (DOS), Justice (DOJ), and Treasury (DOT) launched a coordinated drive against
Mexico's Gulf/Los Zetas drug cartel, including new indictments and an asset freeze. The DOJ unveiled new drug
trafficking charges against the four suspected leaders and 15 other members of the cartel dubbed the "Company" by
U.S. officials, while the DOS announced rewards totaling USD 50 million for information leading to their capture. The
U.S. DOT said it was putting the four suspected leaders on a special sanctions list to try to clamp down on drug
dealing and violence.
Government Challenges La Familia Drug Cartel
July 22, 2009
The Ministry of Interior (SEGOB) said the La Familia Michoacana drug cartel should cease harassing citizens and
challenged it to face the authority. SEGOB’s head and the governor of the state of Michoacan agreed during a
meeting to cooperate in order to address the cartel. Earlier this month a top operative of the cartel telephoned a
Michoacan television station to offer President Calderon a truce. Authorities immediately rejected the idea of
negotiations with any criminal organization.
CNDH: Mexico Is Doing U.S.’s Dirty Work
July 24, 2009
According to the National Human Rights Commission (CNDH), Mexico is doing the U.S.’s dirty work and has
compromised the country’s human rights by launching a military crackdown on drug cartels. CNDH said Mexico
should change its strategy to fight crime and withdraw troops from the streets, as it says that they have only violated
human rights and failed to eliminate the drug trafficking and violence problem. CNDH said the U.S. should do its part
in the shared narcotics issue, as it is the largest illegal drugs consumer worldwide.
University, Conacyt: Mexican Sex Traffickers Victimize 10,000 Women Every Year
July 20, 2009
According to a report by the state University of Nuevo Leon, funded by the National Science and Technology Council
(Conacyt), rings engaging in human trafficking entrap or abduct 10,000 women in the southern and central states of
Mexico for sexual exploitation in the northern part of the country every year. The investigators found, for example, that
in Monterrey, capital of Nuevo Leon and a leading business hub, most sexually exploited women are brought by
gangs from other regions under the false pretense of getting them jobs. People trafficking is considered by the U.N.
as the third most lucrative illegal business in the world after drug and arms trafficking, with the gangs involved taking
in revenues reported at around USD 6 billion annually.
PGR Arrests One Of FBI's Ten Most Wanted
July 20, 2009
The Federal Attorney General’s Office (PGR) announced that Emigdio Preciado Jr., one of the U.S. Federal Bureau
of Investigation’s (FBI) Ten Most Wanted fugitives, has been apprehended and will be extradited to the U.S. PGR
said Preciado was captured in the state of Nayarit. U.S. authorities had requested the arrest of Preciado, who is
wanted by a Los Angeles court on charges of attempted murder and other offenses. The suspect allegedly fired at
L.A. County Sheriff's deputies with an AK-47 assault rifle in 2000, leaving one of them partially paralyzed and
suffering from memory loss. U.S. federal authorities in Los Angeles said they will pay a reward of up to USD 150,000
for fugitives following the capture of Preciado.
SEDENA: Soldiers Arrest Alleged Trafficker With USD 3.6 Million
July 21, 2009
The National Defense Ministry (SEDENA) announced that soldiers have arrested Luis Ibarra, a suspected drug
trafficker in the border city of Tijuana who was carrying jewelry, narcotics, and USD 3.6 million in cash. SEDENA said
Ibarra belongs to a cell in charge of making and trafficking methamphetamine for alleged drug kingpin Teodoro Garcia
Simental. Garcia Simental has been waging a bloody battle against his former bosses in the Arellano Felix drug
cartel.
U.S. Authorities Nab 82 Mexicans With USD 1 Billion In Marijuana
July 21, 2009
U.S. authorities said they detained 82 Mexicans in California from whom they seized as much as USD 1 billion in
marijuana. Authorities did not specify which cartel the drugs belong to. The seizure came as California authorities
launched a police operation July 13 to locate marijuana growing fields and which will last through November.
Authorities Detain Five In Killing Of U.S. Border Agent
July 22, 2009
Authorities have detained five men in connection with the killing of 30-year-old U.S. Border Patrol Agent Robert
Rosas, including Ernesto Parra Valenzuela, 36, who is the main suspect. Four others were detained a day later.
Agent Rosas was fatally shot in San Diego County, California, earlier this month.
U.S. Authorities Arrest Four In Sonora Day Care Fire
July 22, 2009
The Federal Attorney General’s Office (PGR) announced that U.S. authorities located and arrested four suspects in
the recent day care fire that occurred in the city of Hermosillo, in the state of Sonora, where over 47 babies perished.
Authorities said they have started extradition procedures to send the suspects back to Mexico.
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Sports
Mexico Wins Gold Cup; Beats U.S. 5-0
July 24, 2009
Mexico beat the U.S. 5-0 to win the CONCACAF Gold Cup final, the first victory of Mexico’s National Soccer Team
against the U.S. in the States over the past 10 years. It was also the first time Mexico has beaten the U.S. by 5 goals
since 1980 and the first time Mexico has won the Cup since 1998.
Paola Ezpinoza Wins Gold At Swimming World Championships
July 18, 2009
Mexican diver Paola Espinosa beat Chinese Olympic champion Chen Ruolin for the gold medal in women’s 10-meter
platform diving at the swimming World Championships. Espinosa scored 428.25 points through five dives. Chen took
the silver medal with 417.60 points, and Kang Li, also of China, was third with 410.35.
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Other
CONEVAL: More Than 50 Million Mexicans Live In Poverty
July 20, 2009
According to the official National Council for the Evaluation of Social Development Policy (Coneval), more than 47%
of Mexico's 107 million people live in poverty. The portion of Mexicans below the poverty line increased 5% between
2006 and 2008. Coneval's figures show that 50.6 million Mexicans lack sufficient income to satisfy their basic needs
in health care, food, housing, clothing, and transportation. Within that total, 19.4 million people struggle to even put
food on the table. The figures nonetheless show an improvement compared with the situation in 2000, when 53.6% of
Mexicans lived below the official poverty line, though the ranks of the poor are larger now in absolute numbers.
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