EconomyFinancialThey go with AMLO: Mexican businessmen support measures to...

They go with AMLO: Mexican businessmen support measures to contain inflation

After a week of waiting to learn about the federal government’s plan to mitigate the impact of inflation on the products of the basic basket, the measures announced today by President Andrés Manuel López Obrador have the approval of the private initiative.

The plan presented this morning by the president and the head of the Ministry of Finance, Rogelio Ramírez de la O. consists of an increase in the production of grains such as corn, beans and rice; zero tariff for some food imports, as well as agreements with companies such as Gruma, Bimbo, Kimberly Clark, Grupomar and Walmart.

“It is something that everyone is going to contribute to the best of their ability and that helps a lot. It’s good that it’s going to be like this, in support of the family economy on a very sensitive issue, which is inflation, which hits everyone, especially those who have the least,” said Vicente Yáñez, who chairs the National Association of Self-Service and Department Stores (Antad), to which the supermarket chains belong, with the exception of Walmart.

José Medina Mora, president of the Employers’ Confederation of the Mexican Republic (Coparmex), applauded that the initiative is voluntary, while monitoring the evolution of prices will allow determining whether six months will be enough to have a positive impact on prices of the products considered within the basic basket.

“The announcement that 21 of the 24 products (of the basic basket) have a zero tariff, allows products such as corn or rice to be imported, without the tariff and then prices immediately drop because costs fall. The effects with the increase in production are medium term, they will not be seen from one day to the next. These are planting seasons where, if we actually manage to increase production, prices drop and there are conditions for the country to produce more corn, fertilizer and natural gas, that will help prices drop in the medium term,” declared when leaving the National Palace, after the announcement,

The president of Coparmex added that a regulatory improvement is also necessary, while strengthening road safety is also important, since the increase in theft of merchandise raises prices, issues that the private initiative brought to the table during the conversations with the government to outline the plan.

Medina Mora considers price monitoring to be another success, meanwhile, he announced that meetings will be held with the Secretaries of Finance, Economy, as well as Profeco, to evaluate the results and decide where the measure will be oriented, that is, if it will require a shorter or longer execution time compared to the six months considered.

Chedraui turns and joins the pact

Directors of the Chedraui retail chain were also present during the presentation of the plan, after Antonio Chedraui, general director of Grupo Chedraui, said last week in a conference with analysts that these measures usually affect the supply of products and, in the long term, generate price increases and stress in the market.

For now, Arturo Vasconcelos, deputy general director of Chedraui, commented that they will collaborate with the Treasury, Economy and Profeco in the plan, although he considered that there are details to refine, without detailing what these points are.

“This plan has measures that are directed towards production, distribution and trade. It includes macroeconomic variables that we believe may have an impact in some way, understanding that inflation is occurring worldwide. The program has to do with a collaboration between industry, producers and distributors and a monitoring that will be carried out of the basket. The evolution of this will depend on how the areas manage to collaborate and how the results of the macroeconomic variables are presented,” he declared.

Antonio del Valle, president of the Mexican Business Council (CMN), who witnessed the announcement in the first row, also described as “very good”, the program that he considers is a joint effort where each company can join forces voluntarily, while he stressed that it is necessary to consider that the inflationary effect is experienced worldwide.

“It is a great initiative that must be supported. We hope that yes (six months) will be enough, we must be clear that (inflation) is a phenomenon that comes from abroad and we experience it internationally, and everything we do internally will support it, but we must not lose sight of that comes from outside. In these six months we are going to see how (the initiative) progresses and we will sit down later to see what else can be done,” he said.

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