The Mexican government will extend anti-inflation measures for another year, adding new products to the list of items temporarily exempt from tariffs in an attempt to control rising prices.
In a statement, the Economy Ministry explained that the Package Against Inflation and Shortages (PACIC) and the Opening Agreement Against Inflation and Shortages (Apecic) would be combined into one instrument and extended until Dec. 31, 2023. The measures, which were introduced in May and October, respectively, aim to achieve an 8% reduction in the price of key products by temporarily exempting them from import tariffs.
The Ministry announced a list of 33 further products that would be added to the program, including foodstuffs such as turkey, lentils and lettuce; personal hygiene products such as deodorant and toothbrushes; animal feed; and agricultural products.
La Secretaría de Economía informa que a partir de la entrada en vigor del APECIC, se ha cumplido con el compromiso de mantener los precios de la canasta básica por debajo de los 1,039 pesos.https://t.co/SBbhl6ph4H pic.twitter.com/gxQke0L8D4
— Economía México (@SE_mx) January 5, 2023
The package also grants businesses that hold a Unique Universal License (LUU) greater flexibility to review non-tariff regulations that increase import and distribution costs, such as motorway tolls. In addition, it restricts exports of some essential foodstuffs.
On Thursday, the Ministry defended the PACIC’s record, while acknowledging that prices of essential products remain high.
“Despite the implementation of the Pacic in May 2022, prices maintained a growth trend,” they said in a statement on Twitter. “On the implementation of Apecic in October 2022, in agreement with the 15 companies involved in the pact, prices began to show a slight decrease. The commitment to keep the prices of the basic basket below 1,039 pesos [US $55] has been fulfilled.”
Mexico’s headline inflation fell to 7.77% during the first half of December, the lowest rate since May, but ended the year at 7.82% annual rate, according to data published today by INEGI. Core inflation over the whole year was around 8.35%, its highest rate for two decades. Sharper increases were seen in the prices of basic foodstuffs, which are excluded from the core measure because of their volatility. These peaked in September and have since dropped slightly.
For his part, President López Obrador has defended his administration’s record on inflation, while acknowledging in his end-of-year address that the issue “is something that we have to take care of in 2023.”