Mexico to unveil inflation plan next week targeting lower food prices

Mexican President Andres Manuel Lopez Obrador delivers a speech at the National Palace in Mexico City, Mexico April 12, 2022. REUTERS/Henry Romero

MEXICO Town, April 27 (Reuters) – Mexico’s government following 7 days will unveil a plan agreed with company teams to degree costs nationwide for staples this kind of as corn, beans, rice and milk in an exertion to defeat down inflation, President Andres Manuel Lopez Obrador stated on Wednesday.

The prepare will intention for costs of essential products to price tag roughly 20% fewer than latest retail store rates, Agriculture Minister Victor Villalobos instructed reporters after the president’s remarks.

Villalobos extra that the response from companies had been optimistic, and that he expected the approach would be short-time period, long lasting just right until year’s finish.

Inflation is at 7.72%, a two-decade higher in Mexico, taking in into wallets for hundreds of thousands of inadequate individuals that Lopez Obrador vowed to make a precedence.

The central financial institution lifted interest rates 7 situations in a row as it seeks to convey inflation nearer to its 3% goal.

Lopez Obrador said he will present specifics of the prepare on May 4. It will contain specials with huge producers, distributors and shops to contain rates in some two dozen types of items, he included.

“No price controls, we are going to assurance honest costs in the basic principles,” Lopez Obrador informed his regular information convention, indicating he required to assure even costs nationwide, regardless of whether in the cash, border towns or on the southeast coast.

Lopez Obrador’s feedback set off some critiques that a significant-handedness could backfire.

“The Mexican governing administration is toying with the thought of rate controls,” Tony Payan, a Mexico pro at Houston’s Rice College, explained in a tweet. “It is really been tried ahead of, with extremely undesirable impacts on the financial system.”

Mexico has a historical past of seeking to handle prices to deal with soaring inflation, these types of as when a personal debt disaster hit the economic climate in the 1980s and when a spike in corn tortilla rates in 2007 sparked main road protests.

Lopez Obrador also known as on farmers to grow a lot more crops for by themselves. “If we are self-sufficient in food stuff, we are going to win,” he mentioned.

Reporting by Daina Beth Solomon and Raul Cortes
Editing by Dave Graham, Paul Simao and Mark Heinrich

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