Wednesday, January 07, 2009

Calderon cuts energy costs to calm crisis

MEXICO CITY, Jan 7 (Reuters) - Mexican President Felipe Calderon unveiled sweeping cuts to energy prices on Wednesday, his latest measure to soothe the impact of the global economic crisis on consumers and businesses.

The steps announced by Calderon should help the central bank get a handle on inflation, currently at a more than seven-year high.

Calderon said he would freeze gasoline prices and would lower household gas prices by 10 percent and electricity rates for businesses by up to 20 percent.

"Gasoline prices are being frozen across the country for the whole year," Calderon said.

Mexicans have increasingly called for the government to lower gasoline prices, which the government administers, since oil prices tumbled from record highs late last year.

Mexico is a major oil producer and gasoline is subsidized at the pump. The government accelerated price rises last year as soaring world prices made subsidies a bigger burden.

Lofty inflation has kept Mexico's central bank from cutting interest rates to shore up economic growth, expected to take a hit this year because of slumping U.S. demand.

"We're going to live through a period of big difficulties, in terms of economic growth, investment and employment," Calderon said. (Reporting by Jason Lange and Luis Rojas; Editing by James Dalgleish)


Reuters Article

1 comments:

On Mexican Time said...

Just found your blog!!!

I am a strong supporter of Calderon and I truly hope he can do something to lessen the effects of the global economy on Mexico's future... Here's hoping!

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