Mexico is highly dependent on exports to the U.S., which represent more than a quarter of the country's GDP. The result is that the Mexican economy is strongly linked to the U.S. business cycle, and has suffered from the economic slowdown in the United States. Real GDP grew by 5.1% in 2006, 3.3% in 2007, and 1.3% in 2008. Government officials expect the economy to contract by 6.8% for 2009 and rebound in 2010 with 3% growth.
Mexico's trade regime is among the most open in the world, with free trade agreements with the U.S., Canada, the EU, and many other countries (44 total). Since the 1994 devaluation of the peso, successive Mexican governments have improved the country's macroeconomic fundamentals. Inflation and public sector deficits are under control, while the current account balance and public debt profile have improved. As of December 2009, Standard & Poor’s and Fitch downgraded Mexico’s sovereign debt rating one notch, citing fiscal concerns. Nevertheless, Mexico’s sovereign debt remains investment-grade, with a stable outlook