There is goes the main government induced inflation pressure.

[ocelotl]

Today Mexican Governement announced the first resolution of the economy supporting plan. Still no reduction from the 8.25 target central bank rate.

Mexico to Freeze Gasoline Prices, Boost Jobs Spending (Update2)
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By Andres R. Martinez and Jens Erik Gould
Jan. 7 (Bloomberg) -- Mexico will freeze the price of gasoline for the rest of 2009, cut electricity rates for some industries and expand unemployment benefits as part of a financial stimulus to help the nation weather an economic slump.
The government and industries will increase spending on infrastructure such as roads, airports and sea ports to 570 billion pesos ($42.4 billion) this year, President Felipe Calderon said today in Mexico City. The price of heating gas will be cut by 10 percent and frozen for the rest of the year.



Continue...

I just hope it works, we have a huge inflationary pressure from the 25% exchange rate devalution against USD happened in last october...

[Andreuccio]

Re: There is goes the main government induced inflation pressure.

The price of heating gas will be cut by 10 percent and frozen for the rest of the year.

Reminds me of a play on words in Boccaccio's Decameron:

arrivai in quelle sante terre dove l'anno di state vi vale il pan freddo quattro denari, e il caldo v'è per niente.

I arrived in the Holy Land where in the summer cold bread costs four dinars and the hot (bread)/heat is free.

[Sharky]

Re: There is goes the main government induced inflation pressure.

Price controls almost always have the same end result: shortages. Black marketeers must be cheering.

Watch for Mexico to cut back or stop oil exports soon too.

[ocelotl]

Re: There is goes the main government induced inflation pressure.

Price controls almost always have the same end result: shortages. Black marketeers must be cheering.

Watch for Mexico to cut back or stop oil exports soon too.

Haven't been around lately...But have to answer this since it doesn't look at the big picture:

First: Hydrocarbon prices have been set by decree by the Mexican Government since the late '30's since the only provider is PEMEX, through its subsidiaries...

Second: Black market exist, I'm aware of that, in the form of border trespass of gas, earlier last year from Mexico to US, and later and up to now from US to Mexico. On the case of "Petroleum Liquified Gas" and Natural Gas, the merm is in the distributors side by the way of water in the portable tanks, mismeasurement in the distribution network and misquoting of billings. There is also the merm in the steal from PEMEX ducts in rural areas.

I'm in Mexico, I do concern about the reducing of oil exports, that's unavoidable in he short term. Within the next five years we will be seeing the closure of our position as net hidrocarbons exporter. ¿What Next? I still don't know. But what concerns me more is that before that, PEMEX may get bankrupt due to lack of payment ability to retirees, We may not be open to share part of federal budget to cover that hole. That will be internally an inflection point that will mark an abrupt change to the way Mexico is going to develop in the world scene.