Front Matter Page

© 2005 International Monetary Fund

October 2002

IMF Country Report No. 02/238

Mexico: Selected Issues

This Selected Issues paper for Mexico was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on September 9, 2002. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of Mexico or the Executive Board of the IMF.

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Front Matter Page

INTERNATIONAL MONETARY FUND

MEXICO

Selected Issues

Prepared by Western Hemisphere Department in Collaboration with Other Departments

Approved by the Western Hemisphere Department

September 9, 2002

Contents

• I. The Mexican Corporate Sector

  • A. Introduction

  • B. Key Structural Features

  • C. Balance Sheet and Profitability Analysis

  • D. Stress Tests

• Tables

• I.

  • 1. Characteristics of the Corporate Sector, 1999

  • 2. Sectoral Composition of the Mexican Stock Exchange

  • 3. Export Orientation of the Mexican Stock Exchange

  • 4. Size Indicators

  • 5. Financial Ratios

  • 6. Financial Ratios for the Top Twenty Five Firms, end-2001

  • 7. Financial Ratios by Type of Company

  • 8. Corporate Sector Stress Tests

• Appendix Tables

• I.

  • 1. Total Debt to Common Equity

  • 2. Short-Term Debt to Total Debt

  • 3. Current Ratio

  • 4. Earnings Before Interest, Taxes and Depreciation to Interest Expense on Debt

  • 5. Earnings Before Interest and Taxes Minus Income and Other Taxes to Sales

• Figures

• I.

  • 1. Geographical Distribution of Exports, 2001

  • 2. Export Orientation of the Mexican Stock Exchange

  • 3. Corporate Debt

• II. Private Sector Financing in Mexico

  • A. Introduction

  • B. Evolution of Credit to the Private Sector in Mexico

  • C. Private Firms’ Financing Sources

  • D. Credit to Households

  • E. Recent Regulatory Reforms

  • F. Prospects for Credit Growth

• Tables

• II.

  • 1. Evolution of Credit to the Private Sector 1994–2002

  • 2. Domestic Institutional Investors 2001–01

  • 3. Firm’s Financing Sources

  • 4. Firm’s Financing for not Using Bank Credit

  • 5. Firm’s Financing Sources by Firm Size

  • 6. Firm’s Financing Sources by Firm Type

  • 7. Firm’s Uses of Bank Credit

  • 8. Credit to Households, 2001

• Text Boxes

• II.

  • 1. Domestic Capital Markets

• Figures

• II.

  • 1. Composition of Credit to the Private Sector

  • 2. Bank Credit to the Private Sector Nonrestructured Loans

• III. Public Sector Debt Management

  • A. Introduction

  • B. Institutional Framework for Debt Management

  • C. Composition of Public Sector Debt

  • D. Debt Management Strategy

  • E. Conclusions

• Tables

• III.

  • 1. Composition of Public Sector External Debt

  • 2. Total Public Sector Gross and Net Debt, 2001

  • 3 Composition of Public Sector Debt 2000–01

  • 4. Public Sector External Debt by Type of Creditor, 2001

  • 5. Public Sector External Debt by Currency, 2001

  • 6. Public Sector External Debt, Amortization Profile 2001–12

  • 7. Public Sector Domestic Debt by Debtor and Type of Instrument

  • 8. Amortization Profile of Domestic Debt, 2002–10

• Text Boxes

• III.

  • 1. PIDIREGAS Projects

• Figures

• III.

  • 1. Public Sector Gross Debt 1990–2001

  • 2. Composition of External Debt 1994–2001

  • 3. Amortization Profile of External Debt

  • 4. Composition of Domestic Debt by Type of Instrument, 2001

  • 5. Average Maturity of Domestic Debt 1990–2001

• IV. The Financial Soundness of Mexico’s Public Pension System

  • A. Assessing the Financial Soundness of Pension Systems

  • B. Mexico’s Public Pension System

  • C. Sources of Financial Pressure

  • D. Budgetary Expenditure on Pensions

  • E. The Financial Soundness of Mexico’s Pension System

  • F. Conclusions

• Tables

• IV.

  • 1. Old Age Population Dynamics in Mexico 2000–50

  • 2. Budgetary Pension Expenditure 1995–2002

  • 3. Estimated Cost of the 1997 Pension Reform

  • 4. Estimated Unfunded Liabilities in Mexico’s Pension System

• Appendix Tables

• IV.

  • 1. Main Characteristics of Pension Plans in Mexico

  • 2. Selected Pension Indicators of Public Pension Plans

• Text Boxes

• IV.

  • 1. Mexico’s Pension Reform

• Figures

• IV.

  • 1. Mexico’s Pension System

• V. Institutional Framework in Mexico

  • A. Introduction

  • B. Budgetary Institutions

  • C. Subnational Governments

  • D. Central Bank Operations

  • E. Financial Sector

• Tables

• V.

  • 1. Budget Implementation in Mexico

  • 2. Subnational Government Public Finances, 1996–2000

• VI. Assessing Fiscal and External Sustainability: The Case of Mexico

  • A. Introduction

  • B. Medium–Term Baseline Projections and Sensitivity Tests

  • C. Stress Test Based on a Repeat of Historical Capital Account Crises

  • D. Conclusions

• Tables

• VI.

  • 1. Historical versus Baseline Scenario Parametres

  • 2. Historical versus Baseline Scenario parameters

  • 3. Stress Test Scenario Assumption

  • 4. Sources of the BOP GAP

• Appendix Tables

• VI.

  • 1. Public Sector Debt Sustainability Analysis

  • 2. External Debt Sustainability Analysis

• Figures

• VI.

  • 1. Sensitivity of Gross Pulbic Debt

  • 2. Mexican Sovereign Spread and IMF Contagion Index