MEXICO CITY, Jan 9, 2003 (El Economista/Corporate Mexico by Internet Securities, Inc. via COMTEX) -- For the first time in four years, the Bank of Mexico did not make its inflation target. In 2002, the decrease in electricity subsidies, salaries and the increase in agricultural product prices took annual inflation to 5.75%, revealed a poll of Mexican and foreign analysts.The official figure will be announced today. If the analysts are correct, the bank will have missed its target by 1.25%.The impact of this gap will hit the economy this year, said Alejandro Rodriguez, a specialist in monetary and price policy at the Ibero-American University; it will set a poor precedent for 2003.The 3% target for this year "looks difficult" because of the wide gap with the close of general prices in 2002. According to analysts at Santander Mexicano, the deviation from the 2002 goal can also be blamed on the erratic behavior of agriculture prices that year. They alone rose 11.5% overall, more than double the inflation rate for the year.Adding to this the performance of public and administrated prices, which rose 16.5%, it was difficult to continue the constant decline in prices registered since 1998.According to Banamex and Santander, without the increases in electricity rates, inflation would have been 3.8%, a positive result from their perspective because it anticipates a gradual approximation to the 2003 goal. JP Morgan was the most pessimistic in its estimate for 2002 inflation, putting the rate at 5.8%. The Bank of Mexico insists that it did not fail last year. Officials said that in order to have reached the 4.5% target, it was fundamental that prices of goods and services drop much more than the target rate. "The negative impact of public prices made it evident that inflation would be more than 5.6% in 2002," they said.
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