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MEXICO CITY-The fall of almost 40% in the value of the peso in the past three weeks is putting a swift end to a three-year boom in demand for imports in Mexico.

Now the inflation-crunching policy announced by the government last week is forcing many marketers to take a new look at the country they were so confident about a month ago.

Since Jan. 1, merchants have begun marking up prices on anything imported, from computer notebooks to compact disc players. Large retailers are expected to follow suit when pre-devaluation inventories run out. For the av- erage Mexican, that puts the price of even imported cereal out of reach.

Determined to halt the inflation, the government plans to tighten credit, restrain salary growth and limit price rises.

For marketers encouraged by the potential of the Mexican middle class' appetite for products from frozen desserts to computers, the outlook is bleak. Many families are likely to return to Mexican brands as the price of imports rise.

The plunge in the peso's value could hurt the flow of U.S.-made Chrysler products to Mexico, but at the same time provide incentive to increase vehicle production in the country, said Robert Lutz, Chrysler Corp. president.

"Our initial reaction is that it's not really a disaster. In a month, we should see a much more stable situation, and at that point we will develop our plans," Mr. Lutz said.

For many multinationals, the devaluation won't have much effect because they produce their products locally.

Procter & Gamble Co., which gets about $1 billion, or 3% of its worldwide business, from Mexico, has five local manufacturing plants producing goods for most of its core businesses. A P&G spokesman in Cincinnati said the company doesn't expect the peso devaluation to force any immediate change in plans.

Some marketers are taking a longer-term view. U.S. retailers, which have been flocking to Mexico to open stores, say they aren't changing plans yet. J.C. Penney Co. has construction of two stores well under way, said Duncan Muir, Penney's manager of financial public relations. "There's no change in plans, but it's possible that if conditions change, future stores could come up for review."

Economists agree that the economic fundamentals are much sounder than they were when Mexico last devalued the peso, in 1987. The government expects to run a budget surplus this year; Mexican industry is more competitive, and a host of free-market reforms has strengthened the country's infrastructure.M

Nancy Giges and Raymond Serafin contributed to this story.

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