The federal government continues negotiations with businessmen and producers, in order to agree on a joint plan to stop the escalation of inflation in our country.
Sources from the federal government told El Economista that the price control of 25 products of the basic basket, as mentioned, is not a topic of interest to them nor is it addressed in the dialogue that members of the economic cabinet carry out with businessmen and producers. They detailed that other means are being sought to boost the internal market.
The sources reported that President Andrés Manuel López Obrador commissioned members of his economic cabinet to take the necessary steps with the sectors to stop the increase in prices of products in the basic basket.
For example, the Secretary of Agriculture, Víctor Villalobos, for his part, is dedicated to carrying out the corresponding evaluations to increase the national agri-food production in the country, mainly in basic grains such as corn, rice, beans and wheat, in addition to milk.
The Secretary of Economy, Tatiana Clouthier, is in charge of the dialogue with the country’s business sectors, especially after the president of the Employers’ Confederation of the Mexican Republic, José Medina Mora, said that companies in Mexico are willing to contribute a portion of its profits to contain the rise in prices of products of the basic basket.
For example, yesterday Daniel Servitje, general director of Grupo Bimbo, told financial analysts that the company held preliminary talks with the Mexican government on the dynamics of the price of white bread.
In the federal government there is concern about the impact on the economy of families due to the escalation in the National Consumer Price Index (INPC), which presented a fortnightly inflation of 0.16% in the first half of April 2022, therefore that the annual rate was located at 7.72 percent. As a reference, in the same period of 2021, biweekly inflation was 0.06% and annual 6.05 percent.
The prices of agricultural products increased 0.65%, highlighting the price of tomato, serrano pepper and avocado, which were sold at 16.65, 15.16 and 4.73% more expensive, respectively. Energy prices and rates authorized by the government fell 1.70% at a fortnightly rate, which was mainly due to adjustments in electricity rates within the warm season scheme in 18 cities in the country.
President Andrés Manuel López Obrador indicated that next week he will present a plan to face the inflation caused by the Covid-19 pandemic and Russia’s invasion of Ukraine.
The president indicated that the plan seeks to reinforce the government’s intervention in food matters, for which there is already communication with businessmen and producers.
“We are going to give an option, an alternative, rather, we are going to launch a program to deal with inflation. In one more week we will present the plan, we have advanced a lot, we are talking with businessmen, with producers, but the call is: we are going to produce, we are going to sow. Now that it is time, with the first rains, to sow and everything we do, even if it is small plots to have corn, to have beans, to have basic foods, it helps, it helps a lot”, he said.
Cooperation yes, control no
The president of the Employers’ Confederation of the Mexican Republic (Coparmex), José Medina Mora Icaza, spoke out against price controls on food products.
“From Coparmex and the business organizations we manifest ourselves against the price control. When a government sets a price limit, that is, it puts in a price control, it distorts the markets”, he stated.
“The proposal of the business organizations is that they allow the free market, in such a way that the companies have a profit and contribute part of the profit so that the subsidy is granted to the population that really needs it,” he stressed.
The business sector estimates that inflation will remain high during 2022, which would be around 6% at the end of the year and possibly stabilize towards 2024, at levels of 3% as proposed by the Bank of Mexico (Banxico).