High inflation drives relief plans


Although the central banks have tightened their monetary policy to face inflationary pressure, the governments of several countries have begun to implement relief strategies for the most affected population.

A review carried out by El Economista shows that at least six countries apply temporary subsidies for energy prices as well as cuts to the tax on distributors. This is the case of Mexico, Brazil, Colombia, Peru, Germany and Spain, who apply strategies to soften the rise in gasoline prices.

Germany agreed to provide cash support for low-income citizens, students and pensioners, to offset heating costs.

In America, some governments have been acting for months. Some freezing tariffs, others reducing tariffs and others with targeted cash support.

The Chilean government presented a program that includes keeping public transportation fares frozen. As well as the containment of paraffin, oil and gasoline prices.

Facilities were also granted to expand the competition of liquefied gas bidders, with the aim of improving cost conditions.

Food, less taxes

In other South American countries they are applying VAT rebates on food and fertilizers, reducing tariffs on imported products and even giving cash support to targeted groups, such as the elderly, retirees and students.

In Uruguay, they applied a VAT reduction on meat, bread, flour and noodles. Measures valid for 30 days and with the possibility of extending them and the possibility of removing taxes on imported oil and the exemption of the aforementioned tax on all foods in the basic food basket is under review.

In Brazil, they granted the temporary elimination of import taxes for food, where the upward pressure is concentrated due to the consequences of the war situation that Russia and Ukraine are going through.

El Salvador also opted for the elimination of VAT on products in the basic basket and also applies measures to freeze prices on some products.

In Colombia, they reduced tariffs for agricultural production inputs and deindexed increases in rates and costs that were set at the minimum wage.

Containment measures are also spreading to advanced economies, where inflation is at levels not seen in at least two decades.

With European signature

As the inflationary pressure is worldwide, European countries such as Germany, Poland and Spain are applying measures to release the tension. From the outset, the Polish and German governments approved tax cuts. Poland in particular is granting cash subsidies to low-income households to deal with rising fuel prices, reductions in the VAT rate and elimination of the aforementioned tax on food and fertilizers.

In Spain they are granting a discount of 20 cents per liter of gasoline as well as the decoupling of inflation increases from real estate rental contracts, tolls and energy services such as electricity.

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