united states, which are especially important to cyclical economic activity, mexico ’ s potential long - term economic growth has substantial upside if the nation continues to fortify its fundamentals, which include healthy fiscal finances, low inflation, and a liquid and well - capitalized banking system. its upside potential will also be greater if it promotes pending structural reforms fostering productivity growth and investment. concluding remarks the increasing economic integration of mexico with the united states during the last three decades has benefited both countries significantly. advantages to mexico include greater product specialization and efficiency, and for both nations, a wider variety of goods and services at lower prices. being next to the largest and most diversified economy in the world is a strong advantage for mexico which should not be underestimated. recently, international financial instability has affected mexico mainly through substantial currency depreciation, similar to that experienced by other emerging market currencies, and, to a lesser extent, through slightly higher interest rates. meanwhile, the mexican economy has continued a recovery process which has included more moderate growth in the industrial sector, mainly reflecting slower exports to the united states. mexico ’ s economic outlook remains dependent on the strength of the u. s. economy, but long - term upside potential can be realized if mexico ’ s fundamentals are strengthened, and pending structural reforms approved. finally, monetary policy will continue to be consistent with preserving the convergence of inflation to the permanent 3 percent target. bis central bankers ’ speeches

cyclical factors may also be playing a role. activity in advanced economies has remained below trend since 2009. additional drags include the tightening of fiscal and monetary policies in certain countries to control inflation and counteract disequilibria from expansionary stances undertaken in the own calculations based on ppp - adjusted data for 32 advanced and 29 emerging - market countries, from feenstra, et al. ( 2013 ), “ the next generation of the penn world table ” available for download at www. ggdc. net / pwt. bis central bankers ’ speeches wake of the crisis. this, in turn, has implied stricter banking measures and slower credit growth in some cases. lower commodity prices have also recently hit some nations. in short, emerging economies find themselves facing a new environment, where some of the factors they had counted on to buoy growth may no longer be available. to the extent that both structural and cyclical factors may not support exceptional expansion, emerging economies face new challenges if they desire to enhance sustainable economic growth. the u. s. economic recovery, on the other hand, appears to have gained traction and seems relatively more robust in the face of possibly adverse external conditions, as the upturn is backed by solid domestic demand. labor markets have improved significantly, with the unemployment rate crossing the threshold that had previously been cited by the federal reserve as a reference for eventual monetary normalization. drops in unemployment have repeatedly surpassed federal open market committee ( fomc ) forecasts. strong for some time, the united kingdom is another economy that has been doing well. however, the incipient recovery in the eurozone has recently stalled. additionally, japan ’ s economy appears to have stumbled, largely due to a hike in the consumption tax. the consensus among analysts is that the world economy will see a moderate pickup during the rest of this year and the next, with the united states taking the lead. emerging economies are expected to gradually improve, with growth remaining above those of advanced economies but below rates enjoyed a decade ago. given more optimism on u. s. prospects, the most favored countries would appear to be those closely linked to that economy. 2 downside risks to this scenario for the emerging economies include first, lower - thanexpected advanced - nation recoveries. second, further significant drops in commodity prices could pose difficulties for export income and the public finances of some countries. during the last few weeks, oil prices, for example, have fallen to levels