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 Business News | December 2007 
Calderon Vows to Keep Mexico 2008 Inflation Under 4%
 Adriana Arai - Bloomberg
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 |  | We will maintain responsible public policies to keep low inflation rates so that price increases don't affect the people.
- President Felipe Calderon |  | |
Mexican President Felipe Calderon said he will use "responsible" policies to keep inflation under control in the face of rising prices for oil, corn, wheat and other commodities on international markets.
Calderon said his administration will keep inflation at less than 4 percent this year and the next. The central bank targets inflation of 3 percent, plus or minus 1 percentage point to accommodate for extraordinary price swings.
"We will maintain responsible public policies to keep low inflation rates so that price increases don't affect the people," Calderon said today during a press conference at the Los Pinos presidential residence, according to a transcript sent by his office.
Calderon moved to fend off inflation in September by halting increases in fuel and electricity prices, which are set by the government. The freeze may be extended until March to reduce the inflationary effect of a new fuel tax that will begin in January, UBS Pactual economist Guillermo Aboumrad wrote in a research note today.
Mexican inflation has been at about 4 percent or higher in 10 of the past 12 months, prompting the central bank to increase interest rates for a second time this year in October.
The new fuel tax of 5.5 percent was part of a bill proposed by Calderon to wean the government off oil revenue, which accounts for more than a third of the federal budget. Members of opposition parties, as well as Calderon's National Action Party, criticized the tax as unfairly burdening the poor. The tax will be phased in during 18 months.
To contact the reporter on this story: Adriana Arai in Mexico City at at aarai1(at)bloomberg.net |
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