Freeze meat and food prices, the Argentine model that Mexico will experience

A woman selects food in a supermarket in Ciudad Juárez. (PHOTO: REUTERS / Jose Luis Gonzalez)

The government of President Andrés Manuel López Obrador intends to reach an agreement with businessmen from the supermarket sector to adopt a price control plan for at least 25 products from the basic basket due to general inflation that is already at 7.72%.

For Lopez Obrador his concern is in controlling inflation because “it greatly damages the popular economy”Therefore, it is a priority to implement measures to “try to have low inflation” and announced that his administration is holding negotiations with the private sector so that some food products do not increase in price.

This measure is similar to the one currently The government of the Argentine, Alberto Fernández, maintains, who since October 2021 applied a plan to “fix maximum prices” to almost 1,400 mass consumption products. as a measure to contain inflation, which closed the year at 50.9%.

The Fernandez administration iThis plan included products such as cooking oil, olives, shampoo and conditioners, mayonnaise, sweets, ketchup, dressings, antiperspirant, alcoholic beverages, chicken and beef, chicken, rice, pastaamong many others.

Photograph of a man choosing products in a supermarket in Buenos Aires (Argentina).  Stock photography.  EFE/Demian Alday Estevez
Photograph of a man choosing products in a supermarket in Buenos Aires (Argentina). Stock photography. EFE/Demian Alday Estevez

In the beginningArgentina planned to apply this economic strategy for only three monthshowever, it was extended and by April 2022 the Ministry of Internal Trade added another 60 products to the “careful prices” program in proximity stores, since Until March 2022, inflation in that South American country shot up to 55.1%.

The economic measure was applied initially in supermarkets and later the Argentine government took it to local businesses, what in Mexico we know as convenience stores (Oxxo, Seven).

Despite efforts to “tie down” prices, andn Argentina continues to rise in the Consumer Price Index and according to the International Monetary Fund itself, it will be difficult for the government of Argentine Alberto Fernández to bring the level of inflation to the target of 48%.

In the case of Mexico, Jesús Ramírez Cuevas, spokesman for the Mexican governmentsaid that little more than twenty products will be included in this plan, but These have not yet been defined and it could be on the first of May when they are announced.

The prices per kilogram of the ball onion, potato and lemon increased their cost at the beginning of the year due to inflation.  (PHOTO: GRACIELA LÓPEZ / CUARTOSCURO.COM)
The prices per kilogram of the ball onion, potato and lemon increased their cost at the beginning of the year due to inflation. (PHOTO: GRACIELA LÓPEZ / CUARTOSCURO.COM)

In the same way that happened in Argentina, the Mexican plan will start with an agreement with private companieswith which they will search limit price increases for items in the basic food basket.

According to the National Institute of Statistics and Geography (Inegi) In Mexico, the products that have presented the highest price increase are tomato, chicken, tortilla, serrano pepper, avocadoin addition to the increase in prices in food establishments.

For some economic analystso Valeria Moy, inflation is not controlled by decree and assured that forced price regulations do not usually workry often lead to shortages, corruption and the creation of black markets.

He stressed that the actions to better manage the rise in prices is promote greater competition, combat monopolies and encourage free trade.

The concern of the Mexican government is presented in a scenario of rising inflation at the global level which has been aggravated due to the conflict between Russia and Ukraine, in addition to the paralysis of economic activity in China due to the severe confinements in entire cities due to the outbreak of coronavirus infections.

For Mexico, economic analysts expect inflation to continue to rise until it reaches 8.5% during the third quarter of this year, at which point it should start a downward streak to finally stabilize in 2023, the year in which it could reach the goal set by the Bank of Mexico (Banxico) of 3% plus or minus one percentage point on average.

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