Despite Mexico's strides on taming inflation, some are skeptical on '84 forecast
Mexican officials hope President Miguel de la Madrid Hurtado's economic austerity program will start paying dividends this year with higher employment and lower inflation rates, pulling Mexico out of its worst economic crisis ever.
Early this year Mr. de la Madrid said his government was making progress toward controlling the crisis.
''The rate of inflation in 1983 was around 80 percent, compared with 100 percent for 1982. The goal now will be to cut it in half,'' the President said in his New Year's message. He promised to create jobs to fight record unemployment rates and stimulate industry.
But while some citizens share his optimism, others argue that recovery is not yet around the corner.
Kenneth Shwedel, an official with the National Bank of Mexico, said the government's projection of 40 percent inflation for 1984 was optimistic. ''Inflation might be closer to 50 or 55 percent,'' he said, ''especially if the government tries to inject growth into the economy in an effort to bring down unemployment.'' Growth might spur inflation, which would again bring recession, he said.
When Mr. de la Madrid took office in December of 1982, he inherited a dismal economic situation. Mexico was having great difficulties meeting payments on a foreign debt of more than $80.8 billion. Inflation was raging at around 100 percent annually and thousands were losing their jobs as companies closed or cut back production.
In his inauguration speech, the President promised to lead Mexico out of the crisis. He imposed an austerity program that cut food and transportation subsidies and limited imports and government credit. The measures improved Mexico's international finances - the foreign debt dropped to $78.6 billion dollars last year - and paved the way for a $3.8 billion loan package at favorable terms, which should be approved soon.
But the social cost of the measures has been tremendous. The collapse of consumer buying and lack of financing cut meant capital starvation for business, forcing it to resort to personnel and inventory reductions to survive. A recent study released by the economic research department of the national autonomous University of Mexico said that 3.5 million Mexicans lost their jobs in the last two years and that consumers lost 46 percent of their buying power.
There are no unemployment benefits in Mexico, and dismissed workers do not always receive severance pay. One of the hardest-hit population groups was the middle class, which had prospered under the two previous administrations. It showed its discontent last summer in the municipal and state elections when it inflicted unprecedented setbacks to candidates of the ruling Institutional Revolutionary Party.