ABSTRACT
The key parameters for Mexico in the regard are interest rates, oil prices and the openness of the international economy. The interest rate paid on Mexican external debt is crucial; a 1 percent point increase in the interest rate internationally adds almost $1 billion to its annual interest obligations. The trade policies of the major participants in the international economy are clearly critical to the success of Mexican trade liberalization and exchange rate policy. Uncertainties in this area pose major questions about how much growth Mexico can expect to generate by achieving financial stabilization and by removing sources of microeconomic inefficiencies, as well as about how soon these gains might start being realized. There are numerous forecasts of the future path of interest rates, oil prices and the rate of expansion of the international economy and very little can be done to reduce that uncertainty.
