NewsLatin AmericaLess tariffs and costs on highways: the Government redoubles its plan to try to contain runaway inflation

Less tariffs and costs on highways: the Government redoubles its plan to try to contain runaway inflation

Mexican President Andres Manuel Lopez Obrador poses after signing the anti-inflation plan at the National Palace in Mexico City on October 3, 2022.Isaac Esquivel (EFE)

The Lopez Obrador Administration has relaxed the fiscal and tax burden on food imports to try to contain runaway inflation that already exceeds 8.76% in Mexico. This Monday the president, Andres Manuel Lopez Obrador, has announced a new bet to contain the escalation of prices. A remastered version of the Package Against Inflation and Scarcity (Pacic) -presented in May- that has, once again, the support of businessmen and merchants. The president has recognized that despite initial efforts and the gasoline subsidy they have not been able to stop inflation. “In food, even though the increase has not been much, it is affecting us, it is leading us to lose purchasing power, purchasing power in families, what is the popular economy and inflation affects more people from less income, then we have that challenge”, declared the president this Monday. The agreement will be valid from its publication in the Official Gazette of the Federation and until February 2023.

The Secretary of the Treasury, Rogelio Ramirez de la O, has recognized that despite the gasoline subsidy that the Government has been applying since last March and that has collected a bill of more than 300,000 million pesos, the escalation of food prices is It stands at 4.2% at an annual rate, within this index that until the first half of September stood at 8.76%, according to figures from the National Institute of Statistics and Geography (Inegi).

To try to contain the rise in food, this Administration will grant the companies that sign the agreement a single universal license that alleviates the tax burden and procedures for the importation and distribution of food or supplies. “In this way, they (companies) are entrusted with the responsibility of ensuring that the merchandise they trade meets health standards of safety and quality. During the validity of the agreement, the authority will suspend the review of any regulation that is considered to prevent or make the importation of food and its mobility within the country more expensive, that includes tariffs and other requirements for its entry,” he detailed.

The Ministry of Finance together with Economy have agreed, during the term of this new agreement, to close the export of white corn, beans, sardines and aluminum scrap used for food packaging. According to the figures of the dependency directed by Ramirez de la O, currently, the maximum price of the basic basket is 1,129 pesos. With this new agreement, a reduction of 8% is sought to reach an average of 1,039 pesos, a price that must be valid until February 2023.

The Secretary of Economy, Tatiana Clouthier, and representatives of companies such as Soriana, Chedarui, Bachoco, Grupo Gruma-Maseca, Sukarne, Grupo Sigma Alimentos, among others, were at the announcement at the National Palace. Lopez Obrador has launched a series of compliments to the companies that have signed the agreement, describing them as “entrepreneurs with a social dimension” and has added that the agreement is still open for companies that want to join. The Government, in addition, will freeze the fees for highway concessions until February 28 and will maintain its gasoline subsidy by waiving the Special Tax on Products and Services (IEPS).

Although since last May the Government tried to put the brakes on the rise in food prices, the efforts have not been enough. Until the first fortnight of September, agricultural products registered an increase, for example, the tomato increased 5.57% in 15 days, or the onion rose 4.38%. In the price of corn tortillas, the key product of the Mexican diet and one of the most accurate meters of price increases, it was 1%. Faced with the escalation of prices, the Government has once again sat down with the businessmen and now, yes, they promise, this new price pact will be reflected in the pockets of Mexicans.

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Source: EL PAIS

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