Wednesday, May 22, 2024

Government extends anti-inflation measures through 2023

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.

The Economy Ministry said that while prices remain high, the PACIC and Apecic economic plans were successful in keeping the cost of everyday items below target levels.

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.”

With reports from El Economista, El Financiero and La Jornada

Have something to say? Paid Subscribers get all access to make & read comments.
A completely dried out section of Lake Patzcuaro in Mexico, with cracks in the lake bed

Drought affects just over 70% of Mexico’s territory

The latest national drought monitor reports that 85% of municipalities in Mexico are currently experiencing some level of drought.
A baby monkey drinks water from a volunteer

Authorities investigate reports of mass monkey deaths in southern Mexico

Conservation and animal welfare groups insist that soaring temperatures are to blame for the deaths of over 100 spider and howler monkeys.
Three women shield themselves with umbrellas during a heat wave in Mexico.

Parts of Mexico expecting temperatures above 45 C as third heat wave begins

Only six states will stay below maximum temperatures of 40 C this week, with the northern and southeastern regions bracing for highs above 45 C.