Will AMLO and his team be able to reach an agreement with the IP that beats inflation? We are not talking about half-baked results. The plan must achieve a sustainable decrease in the prices of the basic food basket. This decrease must be real, but above all it must be perceived as such by mothers and fathers, by Mexican consumers. The basic basket has risen 13.4% in the last 12 months, almost double the consumer price index that we use to talk about inflation. A family of four living in urban areas needs 7,900 pesos a month to purchase it. If it is a family that lives in rural areas, it is 6,072 pesos per month. In both cases, the value of the basic basket exceeds the monthly minimum wage, which is 172.87 pesos per day, 5,255 pesos per month.
What does sustainable and widespread mean? The inflationary pressure we are experiencing is not transitory, nor will it end the day after the invasion of Ukraine ends. It is a global phenomenon that experts predict will last all this year, in addition to 2023 and perhaps a part of 2024. The plan must take into account this calendar and the complexity of the challenge: the anti-inflationary effort must last as long as the inflationary storm lasts and , perhaps, include subsidies for the purchase of imported inputs. How to share the burden between the Government and businessmen for such a long period?, is one of the questions. Another very relevant one has to do with the challenge of building and sustaining trust in a context of polarization and mistrust.
How to lower the risk of simulation? In a country of the Southern Cone, whose name I don’t want to remember, an anti-inflationary plan was launched that announced great discounts in some presentations of certain emblematic products. Imagine that we are talking about the can of tuna in a 100-gram presentation. All other presentations were not part of the agreement and kept their price based on market rules. Guess what happened: the discount can was the hardest to find. Available cans of tuna rose at double-digit rates, in contrast to the other which did not rise, but was not on the shelves in more than tiny amounts. The icing on the cake is that the presentation of the pact was the one taken as a reference to measure the official level of inflation. This registered a reduction or stability in prices. The architects of this maneuver were too clever and caused additional damage: they spoiled the inflation measurement.
The Government of the 4 T and the IP have had great agreements that were unproductive, how to make this time different, for the better? To know what we are talking about, remember the infrastructure investment announcements made by the business sector with AMLO and the commitments to reactivate the real estate sector in Mexico City that businessmen have made with Claudia Sheinbaum. There is talk of landing and implementation problems, but also of simulation: some ads belong to a territory in which politicians win and businessmen do not lose. We’ve had hundreds of bad pictures and good speeches or vice versa, but bad results. We continue with investment levels at three-decade lows.
What role will consumers play in the plan? Unlike other government announcements, the results of this plan will be visible to everyone, literally in the corner store or in the market of each neighborhood. Housewives will be able to check every day, very easily, if the plan is working. It is a problem that greatly affects all homes, therefore we can count on your careful observation and comments on social networks. In terms of political communication, the president will face one of the biggest challenges of his mandate. He may say he has other data, but he won’t find a complacent or apathetic audience. Inflation is a very different animal than other economic statistics, such as GDP or investment. It is an animal that no one can look at with indifference.
General Editorial Director of El Economista
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Degree in Economics from the University of Guadalajara. He studied the Master of Journalism in El País, at the Autonomous University of Madrid in 1994, and a specialization in economic journalism at Columbia University in New York. He has been a reporter, business editor and editorial director of the Guadalajara newspaper PÚBLICO, and has worked for the newspapers Siglo 21 and Milenio.
He has specialized in economic journalism and investigative journalism, and has carried out professional stays at Cinco Días in Madrid and San Antonio Express News, in San Antonio, Texas.