The Program to Combat Inflation and Scarcity (PASIC) to be presented by the federal government on May 4 “has little chance of being successful in significantly reducing inflation,” estimated the business sector, concentrating on only 24 consumer products. the basic basket and raise guarantee prices (top price).
The Center for Economic Studies of the Private Sector (CEESP), which is part of the Business Coordinating Council (CCE), regretted that initially the anti-inflationary pact does not contemplate additional measures that help cushion the price increase and instead only focuses on 24 products 14 of them belong to generic items of the basic basket in the INPC and the majority are food (22).
“The 24 products on which the government’s request focuses are mostly only part of the corresponding generics of the INPC (National Consumer Price Index), which as a whole barely explain a quarter of annual inflation,” private sector analysts said.
During the meetings that the federal government had with a group of companies and business organizations, the private sector put on the table several issues that can ease the pressure on prices, such as: avoiding increases in the cost of fuel, measures to promote grain production, road safety, exemption from the consignment note, control of toll rates, elimination of import quotas and tariff reductions, among others. However, the pact only considers guaranteed prices for 24 products for six months.
“Beyond respecting the task of the Bank of Mexico, it is advisable to avoid subsidies, pronounced salary revisions, ceiling prices and claims of self-sufficiency,” established the CEESP.
In its weekly message, the CCE body recalled, during the first meetings with the companies, President Andrés Manuel López mentioned that the pact would ensure a single, “even” price, presumably fixed or stable, throughout the country for “the basket basic” -or perhaps rather for a subset of it-.
He estimated that if these 24 prices were to be contained significantly, their scope within the index would be limited and it would take a long time to be reflected in observed annual inflation.
For example, he added, if all the generic goods to which those 24 products belong remained unchanged at their April prices for the rest of the year, “the reduction in inflation at the end of 2022 for that reason would be only around one percentage point.”
For the private sector, the chances of achieving something significant through the pact or PASIC “are slim.”
However, CEESP considers that the plan could be enriched if it is complemented with agreements between various public entities and the private sector.