Without the PACIC, inflation would have skyrocketed more than 10%: SHCP assured that the basic basket “has already stabilized”



In the first half of July 2022, general inflation in Mexico shot up to 8.16% according to INEGI.  (Photo: REUTERS/Henry Romero)
In the first half of July 2022, general inflation in Mexico shot up to 8.16% according to INEGI. (Photo: REUTERS/Henry Romero)

The Package against Inflation and Famine (PACIC) promoted by the Federal Government, it has been implemented for more than two months. This August 02, the head of the Secretariat of Finance and Public Credit (SHCP), Rogelio Ramirez de la Oassured that if it had not been applied “inflation would have shot up 2.6% more”.

According to the authorities, without the IEPS and the additional incentives for fuels, the inflation would be 2.6% above the current one, which is 8.16namely, the inflation would have reached more than 10%.

“Without this package, inflation would have been higher than it is today, which is why, among other reasons, inflation in Mexico is lower than that of other countries, including the United States”

He added that without the measures promoted, the main affected by this higher percentage of inflation would have been the families since “the consumption of households would have fallen”, thus causing a chain effect with a negative impact on various items, especially in the interest rate of the Bank of Mexico. At the same time, Ramírez de la O assured that the prices of the basic basket have already stabilized.

“The basic basket, of 24 products, has stabilized in this period, in contrast to the basket of the consumer price index. The State is focused and committed to this package”, assured the official.

PHOTO: ISABEL MATEOS /CUARTOSCURO.COM

PHOTO: ISABEL MATEOS /CUARTOSCURO.COM

The Secretary of the Treasury assured that although results have been obtained with the project, items that need to be reinforced were also detected:

-Do not increase energy costs

-Accelerate the opening to basic imports

-Limit the export of white corn to have a strategic reserve in this product

-Ensure agreements with the United States to have more milk and fertilizers

-Regulate railway interconnection rates for food, inputs and fertilizers that are being impacted

– Continue monitoring the stabilization of the basic basket of 24 products

In this regard, the president of Mexico, Andres Manuel Lopez Obradorassured “Mexicans are already at the forefront, setting the example. Although it may not seem like it, inflation in Mexico is lower than that of the United States and less than Europe. In addition our weight is strong”.

On May 4, representatives of Bimbo, Telmex and Walmart confirmed their participation in the strategy federal government proposal to combat inflation in the country, which has reached record highs in recent times.

In fact, according to INEGI, in the first half of July 2022the headline inflation in Mexico shot up to 8.16%, mainly driven by the increase in prices of drinks, food and tobacco.

(Photo: REUTERS / Edgard Garrido)
(Photo: REUTERS / Edgard Garrido)

Meanwhile, given the panorama, the authorities have detailed that the measures taken seek to impact the entire Mexican production and consumption cycle to “stabilize” prices.

1. Production: The stabilization of the price of gasoline and diesel as well as an expected increase in grains and support in fertilizers. This “will lessen the price pressure on a greater supply,” explained Ramírez de la O.

2. Distribution: Strengthening of the highway security strategy, to reduce the theft of supplies and food, no increase in highway tolls, extension of consignment notes and no increase in railway rates. Reduction of costs and customs clearance time, as well as streamline cargo clearance at seaports.

3. Foreign Trade: Zero tariffs on imports of basic goods and supplies,

4. Other measures: Storage of corn and guaranteed prices in it, as well as in rice, beans and milk

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