The government is developing agreements with the country's companies to contain the increase in prices of 24 products in the basic food basket

Mexico is working on a plan to manage inflation

REUTERS/CARLOS JASSO - Central de Abastos, one of the world's largest wholesale market complexes in Mexico City, Mexico

Andrés Manuel López Obrador, president of the Mexican government, announced in a communiqué the creation of an "anti-inflation plan" that proposes to maintain "guarantee prices" for the main products in Mexico's basic food basket. 

The year-on-year rate of inflation currently stands at 7.72%, the highest value recorded in Mexico in the last 21 years, generating a sustained and generalised increase in the prices of goods and services. This reality, together with insufficient wages, prevents access to the basic food basket for 43.9% of the Mexican population, i.e. around 55.7 million people do not have access to adequate food.

The Mexican government's proposal would affect 24 basic products out of the 82 that make up the basic food basket, among which essential goods such as maize, beans, rice and milk are not included, although it assured that there would be agreements with large producers.

"A fair price is a contribution from producers, distributors and large department stores that will help. We are defining 24 basic products so that the poorest people do not suffer and are guaranteed the basics at a fair price," López Obrador said.

As part of the development of the "anti-inflation plan", the Mexican president confirmed the existence of meetings convened by the Ministry of Finance and Public Credit with all the sectors involved, with the aim of guiding and defining the objectives to be followed in order to reduce inflation levels.

Vendedores en la Central de Abastos, en la Ciudad de México
Price controls

The Confederation of Employers of the Mexican Republic (Coparmex) represents a wide range of companies and is trying to reach agreements to avoid increases in basic products, but warned that it is not willing to accept price controls, declared José Medina Mora, national president of the organisation.

"From Coparmex and the business organisations, we are against price controls. When a government sets a price limit, that is to say, introduces price controls, this distorts the markets and in the end it is the consumer who pays the consequences," said José Medina Mora.

The willingness to dialogue on the part of Coparmex companies is open to reach agreements in which each company can contain price increases for the final consumer at the cost of a percentage of their profits on products that affect the basic basket of goods.

El presidente de México, Andrés Manuel López Obrador, ofrece una conferencia de prensa en Oaxaca, México, el 29 de noviembre de 2021
Collaboration of producers

Within the anti-inflation plan, the participation of small producers is essential to achieve the country's self-sufficiency in the production of basic foodstuffs such as maize and beans.

" Exhort, call respectfully to the farmers to plant corn and beans, the basics because the shortage or inflation is faced with self-consumption, not only with commercial production; if we are self-sufficient in food we are doing well because it is not the same to buy beans and corn than to have it in the house," said López Obrador.

The farmers, according to the president, have shown their support for the request, to which López Obrador proposed the possibility of extending the free fertiliser programme.

As is happening globally, inflation in Mexico is running at very high levels, as is the United States with 6.2% inflation by the end of 2021. However, its problems are still far from the hyperinflation suffered by nations such as Venezuela, with 2,700%, Argentina with 52% or Haiti with 16%.

Americas Coordinator: José Antonio Sierra.