investment rate and, particularly, a negative contribution to growth of total factor productivity. as a response to this situation, the mexican authorities embarked since late 2012 on a farreaching structural reform effort, aimed at increasing the economy ’ s growth potential. the see world bank ( 2015 ) : “ latin america treads a narrow path to growth : the slowdown and its macroeconomic challenges ”, semiannual report of the office of the regional chief economist, april ; and organisation for economic co - operation and development ( 2016 ) : “ economic policy reforms 2016 : going for growth interim report ”, february. bis central bankers ’ speeches reform package encompassed a wide range of sectors, as well as a significant strengthening of the institutional setting. the structural reform measures are still under implementation, and the full gains from this transformation will take a long time to materialize. however, some results are readily visible. i would like to highlight in particular the evolution of inflation. as of the first half of may, the annual inflation rate in mexico stood at 2. 5 percent, below the 3 percent target. as a matter of fact, we have been observing figures consecutively under the target since may 2015, an unprecedented achievement. this is of course the result of many factors, the implementation of strong macroeconomic policies the most prominent among them. but structural reform has also played a major role in these developments. for instance, the competition brought about by reform in the telecommunications sector has resulted in significantly lower prices for these products, with beneficial effects on inflation. 10 this has also been supported by a reduction in electricity prices, partly the result of reform in the energy sector. the recent performance of economic growth in mexico is also worth noting. during the years before the eruption of the financial crisis ( 2000 to 2007 ), the mexican economy showed an average annual rate of growth of around 2. 7 percent. the figure for 2011 to 2015 is similar ( 2. 8 percent ), notwithstanding the fact that the rate of gdp growth of our main trading partner, the united states, fell by 0. 6 percentage points between these two periods, 11 and that the economy was hit by a number of other external shocks, including a sharp decline in oil prices. it is also worth noting that mexico is one of the few emes where a deceleration of growth is not observed during the two periods under consideration. although it would be very difficult to isolate the different determinants of this performance, there is clearly a possibility that the

of economic growth observed in this period. in view of the dynamism displayed by their economies, the authorities of many emerging market countries saw little need for economic reform. thus, notwithstanding the opportunity provided by a favorable external environment, they did not carry out the structural measures needed to increase productivity and the potential for growth. the global financial crisis may have even worsened the situation, as one of its side effects has been a reversal in the reform effort in a number of areas, with only a few countries announcing comprehensive reform plans, china, india and mexico among them. 9 naturally, this situation has to change if economic growth in emes is to continue at a reasonable pace. reform priorities vary from one country to another, and therefore it is not possible to recommend specific measures that may be applicable on a generalized basis. however, on the basis of the international experience, a few general principles can be underlined : • economic reforms that reduce barriers to the efficient functioning of markets, fuel competition, stimulate innovation and the adoption of new technologies, and encourage the accumulation of human and physical capital, including infrastructure, are associated with higher productivity growth. • policy reforms may have non - linear effects related to the quality of political and economic institutions. therefore, a broad range of institutional factors need to be taken into consideration in a process of reform. • reforms in different areas interact. these synergies must be taken into account to maximize the impact on productivity growth. • a proper transition to a greater influence of market forces, and therefore an adequate sequencing of reforms, is critical for the success of these efforts. • the drivers of productivity growth may vary along the development path. the “ middle - income trap ” hypothesis points to different policy requirements at different levels of development. • approval of long - ranging reforms may take a long time, among other reasons because of obstacles of a political nature. also, the impact of reforms on productivity will normally be slow. as a result, the payoff of an early move in this direction will be usually very high. to conclude, let me say a few words about the recent efforts of structural reform in mexico, as my country ’ s experience can provide some additional insight on the intricacies of this issue. during the period 1990 – 2011, mexico ’ s economy recorded an average annual rate of growth of around 2. 8 percent, too low for the country ’ s needs. in the presence of a demographic dividend, the main factors behind this performance were a relatively low