Mexico’s economic gloom is hard to crack

As Mexico confronts two years of government austerity, nothing symbolises people’s sense of malaise more than the soaring price of eggs.
As Mexico confronts two years of government austerity, nothing symbolises people’s sense of malaise more than the soaring price of eggs.

By Jude Webber / Financial Times

Unspectacular economic growth, the pain of tax rises, tumbling production of oil, the economy’s lifeblood and the prospect of government spending cuts amounting to 1.5 per cent of gross domestic product this year and next are all damping the mood after heady hopes that President Enrique Peña Nieto’s ambitious reforms would put Mexico on a fast-track to prosperity.

But the surge in the price of one of Mexico’s favourite foodstuffs underscores the volatility and uncertainty clouding the horizon.

Latin America’s second-largest economy is the world’s biggest consumer of eggs, gobbling a whopping 22kg per head last year, and the antitrust authority is investigating whether a rise in prices, which in some places have doubled in recent weeks, is the result of a rigged market.

Marta López, who runs a hole-in-the-wall restaurant, Fonda Xóchitl, in Mexico City, says that meat, chicken, egg and vegetable prices have all risen. She has been feeling the pinch since last year. “I haven’t put my prices up, but I’m finding it hard to cover my costs,” she says.

She sees little hope on the horizon.

http://www.ft.com/intl/cms/s/0/17e43c26-d455-11e4-9bfe-00144feab7de.html#axzz3Wcu2CaMZ

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