Inflation in Mexico
Here's an intriguing example of the politics of economics.On January 9th, this AP story appeared in the San Diego Union-Tribune:
Mexico 2007 inflation one of the lowest on record
"Inflation in Mexico reached one of its lowest levels in history in 2007, the Bank of Mexico announced Wednesday.
"The National Consumer Price Index rose 0.41 percent in December, bringing inflation for the year to 3.76 percent, from 4.05 percent in 2006, the bank said.
"The rate is the second-lowest since the central bank began tracking inflation in 1973..."
The first chart comes from the Latin Focus web site. The blue line is the Consumer Price Index. The second from The Economist magazine.
Note: Annual variation of the Consumer Price Index. (CPI) and Producer Price Index (PPI, INPP ex oil and services).
Source: Banco de Mexico and LatinFocus calculations.
The first chart shows the good news that the government officials and the leadership of the governing party would want to publicize. The second chart measures something else and shows a less-favorable trend. Is that an explanation for the next article?
An article from Reuters, in the same newspaper a day later, suggested that things are not so rosy. Did opposition parties suggest to other reporters that inflation was not a conquered dragon? Or is this perhaps a sign of an economy where the middle and upper classes are doing well, but the poor are not? (It is basic household goods that are targeted with the reported price reductions.) And what are the political implications of all this?
Mexico retailers cut prices to fight inflation
"Mexico's leading retailers have agreed to cut prices on 300 household goods from Thursday through the end of March as part of a government-backed plan to fight inflation...
"Mexican inflation came in at 3.76 percent in 2007, within the central bank's target range and one of the lowest in recent years. But global demand for food commodities and increased amounts of grains being diverted for use in biofuels are expected to push prices higher this year...
"Members of ANTAD, the National Association of Retailers, include leading retailer Wal-Mart de Mexico Soriana and Comercial Mexicana . Retailers, which had a rough ride in 2007 due to weak consumption and a slowing economy, expect to lure more customers with the discounts...
"According to preliminary ANTAD data released last week, its members' same-store sales may have risen only 1.1 percent in 2007, compared with 4.3 percent in 2006."
Labels: economics, Mexico, politics
posted by Ken Wedding @ 8:23 AM
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