MEXICO CITY — A recent federal report showing that the consumer price index rose 8.8% in January "has bludgeoned any hopes" of bringing inflation down to 50% this year, a leading economic analyst said Sunday.
The statistics were compiled by the Bank of Mexico, the country's federal reserve, which keeps tabs on the economy. The increase in consumer prices was more than in any month last year, comparing with 7.4% in January, 1985, and 6.8% in December.
"Even before the (bank's) announcement Friday, private economists were predicting between 75 and 90% (annual inflation) as a result of the drop in oil prices alone, depending on the average price for oil during the year," Patricia Nelson, finance editor of the News, an English-language newspaper, wrote.
Mexico, a major exporter, cut its oil prices by an average of $4 a barrel two weeks ago to remain competitive in a sagging world market. The resulting loss of an estimated $3.6 billion in oil revenue has aggravated Mexico's difficulties in meeting payments on its huge $96.4-billion foreign debt, the second largest in the Third World after Brazil.