The Rio Grande Valley is a booming region, although it remains one of the poorest parts of the United States; however, the Valley is rapidly becoming an important commercial center of the South. Hispanics comprise a large percentage of the Valley's population, ranging from 80% in some centers to 92% in the southernmost city of Brownsville. The McAllen metropolitan area is one of the fastest growing in Texas and the USA, with McAllen ‘s population topping 120,000 and the metropolitan area’s population, including the Mexican city of Reynosa, reaching the 1 million mark.

The Valley’s economy is based on tourism, trade with Mexico and agriculture.

The Valley’s tourism comes from three very different groups: retirees, Mexicans and college students. The retirees (or as they’re called here, Winter Texans) generally come mid- to late fall and stay until early to mid-spring for climate reasons. They are usually from Midwestern United States and Canada and leave their homes to enjoy the all year sunshine of the Valley (the coldest it gets in December is 40-50º F, which is their fall). The college students come to the Valley (specifically South Padre Island) to enjoy the beach during Spring Break (March or April). Mexicans come to the Valley not for the weather or for the beaches, but for the retail stores. They usually are wealthy and middle-class Mexicans from Monterrey(connected to Reynosa by toll road), Tampico and to a lesser extend Victoria City (Ciudad Victoria). According to Cynthia Brown, director of UTPA's Center for Border Economic Studies, $1.4 billion dollars spent by Mexicans was added to the area's economy and paid for 41,000 jobs.

Mexico’s trade with Mexico began with the signing of NAFTA (North American Free Trade Agreement). Numerous multinational corporations such as Maytag, Nokia, and General Electric have established themselves in the McAllen area. This industrial area includes an international airport, two international bridges (with a third under construction), and a foreign trade zone located on the southwest side of the city. Manufacturers can assemble products in maquiladoras (factories located in Mexico), therefore taking advantage of lower worker wages, and re-export the finished product to the United States.

Though it is less important since trade with Mexico ousted it of its place as the Valley’s main economic activity, agriculture still is part of the Valley’s economy. Fields of vegetables, sugar cane, onions and grapefruit and orange trees can be found throughout neighborhoods and farther out into the country as farmers take advantage of the long growing season and warm temperatures. The Valley's citrus industry has played a particularly important role in the region's development, and although much smaller than during its heyday in the 1950's and 1960's, it remains an integral part of the Valley's agricultural economy. The famous Ruby Red Grapefruit was originally developed in the Sharyland area just outside of McAllen.

As a side note:

Texas has an economy that is the second largest in the USA and the 10th largest in the world (if it was considered as a separate nation, which it once was for 10 years) based on nominal GDP figures.