In Mexico, rising price of food staples is among troubling economic signs

By Laurence Iliff
The Dallas Morning News
(MCT)

MEXICO CITY - As President Felipe Calderon marched across the nation unveiling social programs and touting the military-led crackdown against drug lords, a round shadow followed him, darkening his sunny message.

It was the ubiquitous tortilla, rising rapidly in price and reminding Mexicans that all is not well with the once-humming economy.

At public events, angry women intercepted the new president, who faced his first mini-crisis since taking office Dec. 1. Hundreds of thousands of protesters took to the streets in the Mexican capital last Wednesday, demanding an emergency wage hike to counter surging prices for sugar, onions and tortillas.

Mexico, which has been gobbling up U.S. goods and exporting record amounts to America, may face the end of a charmed period during which it grew rapidly with low inflation and managed to generate budget surpluses.

More serious economic problems would mean fewer Mexican shoppers in Dallas malls and more illegal immigrants, analysts say. In addition to the specter of higher food prices and higher inflation, a drop in oil prices for Mexican crude exports could push the government's budget into a deficit. Likewise, oil production is falling. And officials acknowledge a coming economic slowdown and, with it, a possible increase in unemployment