New Plan

Calderón yesterday announced the second major program to counteract the adverse economic climate, and today he came with details: gas prices will be frozen in place for the remainder of the year, $40 billion will be spent on infrastructure projects, unemployment benefits will be expanded, home-heating costs will be lowered and frozen (which will only affect a small part of the country and for no more than a few weeks), and electricity rates to a number of industries were dropped. Here's an analyst quoted by Bloomberg:

The plan will reduce inflation and may have a “marginal” effect on the economic growth, Gabriel Casillas, an economist at UBS AG in Mexico City, wrote in a note to clients. Slower inflation gives the bank room to cut the benchmark rate, he said.

“Banco de Mexico will have no excuse not to cut interest rates at its monthly monetary policy meeting to take place next week,” he said.

The last plan was well received in most quarters, but the economic criticism of Calderón has grown in recent weeks. I'll be interested to see the reaction from the pros.