The Mexican miracle () is a term used to refer to the country's inward-looking development strategy that produced sustained economic growth. It is considered to be a golden age in Mexico's economy in which the Mexican economy grew 6.8% each year. It was a stabilizing economic plan which caused an average growth of 6.8% and industrial production to increase by 8% with inflation staying at only 2.5%. Beginning roughly in the 1940s, the Mexican government would begin to roll out the economic plan that they would call "the Mexican miracle," which would spark an economic boom beginning in 1954 spanning some 15 years and would last until 1970. In Mexico, the Spanish economic term used is "Desarrollo estabilizador" or "Stabilizing Development."
Conditions for sustained growth
An important factor helping sustained growth in the period 1940–1970 was the reduction of political turmoil, particularly around national elections, with the creation of a single, dominant party. In 1946, the party founded by Plutarco Elías Calles in the wake of President-elect Álvaro Obregón's assassination in 1928 changed its name to the Institutional Revolutionary Party. With the party's presidential choice in 1946, Miguel Alemán Valdés, Mexico elected its first civilian president since Francisco I. Madero in 1911. With the subsequent elections of Adolfo Ruiz Cortines (1952–58), Adolfo López Mateos (1958–64), and Gustavo Díaz Ordaz (1964–70), there were no political opposition challenges to the government's implementation of economic programs.
During the presidency of Lázaro Cárdenas, there were significant policies in the social and political spheres that had impacts on future economic policies in Mexico, in particular nationalization of oil in 1938, as well as land reform, and nationalization of railways. Cárdenas was succeeded by the politically more moderate Manuel Ávila Camacho, who initiated a program of industrialization in early 1941 with the Law of Manufacturing Industries. One scholar has called the inaugural date of this law "the birthday of the Institutional Revolution," since it was the inception of import substitution industrialization. Further legislation in 1946 under President Miguel Alemán Valdés, the Law for Development of New and Necessary Industries, was passed.
"In the long view, some of the permanent alterations in Mexico from World War II were economic." Mexico benefited significantly during World War II, by its participation on the side of the Allies. Mexico supplied labor to the U.S. via the Bracero Program, but its most significant contribution was in its supply of material to fight the war. It received cash payments for its material contributions, which meant that following the war the Mexican treasury had robust reserves. Although a participant in the war, like the U.S., Mexico was not a site of combat, so that in the post-war era, Mexico did not need to rebuild damaged infrastructure. However, with the resources available following the war, Mexico embarked on big infrastructure projects.
Ávila Camacho used part of the accumulated savings to pay off foreign debts, so that Mexico's credit standing substantially improved (increasing investors' confidence in the government). With increased revenues coming from the war effort, the government was now in a position to distribute material benefits from the Revolution more widely; he used funds to subsidize food imports that especially affected urban workers. Workers in Mexico received higher salaries during the war, but there was a lack of consumer goods to purchase, so that workers had both personal savings and pent up demand for goods. A key government institution for development, founded under Lázaro Cárdenas's administration was Nacional Financiera (abbreviated Nafin), the national development bank, which funded the expansion of the industrial sector.