Mexico's recovery depends largely on U.S.

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MEXICO CITY, Aug. 23 (UPI) -- Mexico's ailing economy is unlikely to begin recovering until the United States overcomes its economic doldrums, experts say.

That's because Mexico's economy is so dependent on that of the United States.

About 80 percent of Mexican exports go to the United States, and America's worst economic downturn since the Great Depression has caused a huge decline in purchases of products made in Mexico, Allyson Benton, an analyst with the Eurasia Group consulting firm, told CNN.

Another contributor to Mexico's economy, U.S. tourism, has declined because of the H1N1 flu outbreak and fears of violence, said Susan Kaufman Purcell, director of the Center for Hemispheric Policy at the University of Miami.

Mexican oil revenues have dropped with falling prices and a rapid decline in production at the massive Cantarell oil field.

Tax revenues have dwindled too, because the largest percentage of taxes are on income, which decreases when manufacturing slides. And fewer U.S. jobs means fewer Mexicans working and sending money home.

Mexico's gross domestic product -- the market value of all goods and services and a key measure of economic performance -- plunged 10.3 percent during the second quarter of this year, compared with the previous year, the government said last week. The GDP also declined from the previous quarter.