Colombian Government

This cut in the cost of gasoline, Surely it will help reduce the inflationary dynamics which is located in its interannual variation in 6.54%. In Colombia, on the other hand, alvaro Uribe directly excluded the possibility of reductions in the prices of petrol product from the drop in international prices. Thus, with the higher price to be paid, which implies an extra margin correspond to which pay for the current international prices, the Government may put a day with amount owed to ECOPETROL (BVC:ECOPETROL; NYSE:EC) and the Colombian State by concept of fuel subsidies. The idea of the Colombian Government is that once cancelled debt, the money generated by the higher price of fuel applies to economic stimulus policies to confront the crisis situation. While Colombia did not reduce the price of fuel, the rate of retail inflation is beginning to yield product of the impact of other factors. For December is expected to inflation retail shrink to 0.27% from 0.49% on the data of December of the previous year.

In the case of Chile, yesterday occurred during a new drop in the price of gasoline for fifth straight week according to the information provided by Reuters. These losses in the price of fuel represent a positive element for the Chilean economy by reducing domestic inflationary pressures. In fact, the sharp fall in the price of fuel has contributed to reduce inflationary pressures and reduce their rate of growth that is currently at 8.9%. The situation in Argentina is similar to the one raised in Colombia. The fall in the international prices of energy commodities has produced a fiscal benefit to Argentina that has achieved thus reducing subsidies that must pay to keep prices stable. The price of gasoline in Argentina was contained by the actions of the Government, which resulted in a delay of the same against the international rise of the oil price. While the price of fuel would not be reduced, the inflationary Dynamics product of the sharp contraction in domestic demand slowed.

In Mexico the Government is adjusting the price of petrol to rise in a gradual manner. The Banamex financial group, in a note published by the site Mexican La Jornada, harshly criticized this action by the Mexican Government saying: if kept the current slippage of 2 cents a week in the price of gasoline Magna, reached a level of $8.20 per liter average during 2009; This price looks already high against our expectation of $7.10 per liter in the United States, assuming the recovery of the prices of oil and an exchange rate of $12 per dollar at the end of 2009. The maintenance of the upward trend in the price of fuels in Mexico does not contribute to reduce the inflationary pressures that have resulted in a rate of inflation for the month of November of 6,23%. Beyond that countries have transferred the fall in international prices of oil, to a fall in domestic prices of fuels, This decline in the international price of a barrel represents a benefit to all Latin American countries, as to its value, which have cut makes it possible to achieve greater efficiency in the inflation targeting, while for those countries that have not lowered their prices, allows them to recompose its fiscal accounts and/or pay off existing debts caused by the fuel.


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