Mexicans Find Austerity on Their Supermarket Shelves : Economy: Higher prices, fewer choices are the order of the day as costs of imports soar. Peso fails to strengthen.

Across this capital Tuesday, it was not presidents, politicians or rebel forces who brought Mexicans their latest dose of grim reality. Instead, merchants took their turn by making harsh economic austerity hit this country’s consumers.

It was an ugly sight up and down supermarket shelves as prices skyrocketed and selections plummeted.

Foreign goods especially--Bull’s-Eye barbecue sauce, Morton Lite salt, Wisk laundry detergent, to name a few--began their predicted swan song in stores here as the cost of imported goods soared with the government’s recognition that the peso is unlikely to rebound past an exchange rate of six to the dollar.

“Prices are very high,” Rosario Jimenez, a 30-year-old homemaker, said while shopping in a supermarket in a middle-class neighborhood. “We are only buying what is necessary to eat.”

For Mexicans, of course, import prices had already jumped more than 15% in peso terms in January, when the government had hoped that the exchange rate would settle at 4.5 pesos to the dollar.

But on Tuesday, when the peso closed at 6.65 per dollar--weaker than targeted in President Ernesto Zedillo’s latest austerity plan announced last week--prices went skyward anew.

Among its other aspects, Zedillo’s economic plan calls for Mexicans to curb their appetite for imported goods, slashing last year’s $29-billion trade deficit by 93%.

That means fewer Spanish olives, less Chilean wine and a sharp cutback in California almonds for Mexican consumers.

The economic recovery program also projects that inflation will reach 42% this year.

That means that prices of many domestic consumer goods also will leap, government officials said.

True to that projection, the Mexican soft drink industry increased its prices 20%.

“A lot of things have really gone up,” said Yolanda Gonzalez, a 27-year-old student. “There is not so much price change in the basic foods, but now that means our diet will have to be very basic. Before, we could have a little variety in our diets. But not anymore.”

Mexicans no longer seem quite so consumed by the political tumult here--the democratic reforms, political assassinations, peasant uprisings and presidential combat of recent months.

Instead, they are coming to grips with the economic realities stemming from the financial crisis that began Dec. 20, when the government stopped defending the peso and the currency plunged, along with the stock market and foreign investment.

Since then, as prices have increased sharply and the Zedillo administration has negotiated economic rescue plans with U.S. and other international lenders, many Mexicans, like Gonzalez, have grown more and more angry. They blame guarantees in the $20-billion U.S.-Mexico bailout plan for changes in their lifestyle reflecting the higher prices now--and those to come.

Explaining the government’s decision to allow an increase in soft drink prices, which he acknowledged will be followed by price hikes for other products, Commerce Minister Herminio Blanco said, “The fundamental consideration is that price increases let industry be viable, that they let industry keep producing.”

The government has formal price controls on only a handful of products, but it effectively regulates price increases through laws that forbid gouging.

“If an industry does not have the price needed to be viable, to have profits, this industry simply stops producing,” Blanco said. “And, as they say, there is no product more expensive than the one that cannot be found.”

Merchants warned Mexican shoppers that they soon will be unable to find many of the imported goods they have grown accustomed to.

At a Comercial Mexicana grocery store in one middle-class neighborhood, bargain hunters browsed through center-aisle displays of such items--at half price. “We are clearing the products out because distributors are no longer supplying them,” a stock clerk said.

A key part of the government’s economic austerity plan is a pledge to slash Mexico’s trade deficit to $2 billion--about 7% of the 1994 level.

Meeting with import-export business leaders earlier this week, Blanco encouraged them to find international financing for their imports of components and machinery. There was no mention of consumer goods that have become staples for Mexicans in recent years and an important factor in keeping domestic prices lower by creating competition.

Many Mexicans fear that the worst is yet to come.

Gonzalez noted that prices will effectively increase again April 1, when the sales tax is scheduled to jump to 15% from 10%, pending approval by the Mexican Congress.

That is the same day Jimenez’s husband, a city employee, is supposed to receive a 10% pay raise, which “won’t really help because everything is going up: gas, electricity, even sugar and soft drinks,” she said.

“We have to keep an eye out for bargains and just try to spend less,” she said.

But Concepcion Corona, a 75-year-old pensioner, scoffed at other shoppers’ concerns.

“All these people who complain about prices, they are the ones who are buying wine, cigarettes, soft drinks and junk food,” she said. “I am not feeling any inflation, and I come here to shop every day . . . sometimes twice a day. I eat lots of fruits and vegetables and drink plain water. My pensioner’s income is 700 pesos (about $100) a month, and I am fine. You just have to work hard and believe in God.”

Meantime, in other developments Tuesday:

* U.S. and Mexican authorities froze eight accounts in both countries in the name of Mario Ruiz Massieu, the former federal prosecutor accused of covering up evidence in the investigation into his brother’s murder, the attorney general’s office said. The half a dozen Mexican accounts were said to be worth about $1.3 million. Ruiz Massieu was known to have nearly $7 million in a Houston bank. His late brother, Francisco Ruiz Massieu, was the No. 2 official in the ruling party. Investigators now believe that Raul Salinas de Gortari, the former president’s elder brother, masterminded Francisco Ruiz Massieu’s Sept. 28 killing outside a Mexico City hotel.

* The Interior Ministry announced that troops in former rebel-held territory in the southern state of Chiapas will be withdrawn from villages and that military roadblocks will be eliminated to encourage the return of civilians who fled when the Mexican army entered last month. Military patrols will be limited to those necessary to ensure free transit and to protect military contingents posted in the zone, but outside the villages. The measures will be taken to encourage peace talks with the Zapatista National Liberation Army.

Susan Drummet of The Times’ Mexico City Bureau contributed to this report.