AMLO’s anti-inflation plan has few results a year after its launch

“The only effective measure that the government has in the face of inflation of this size is through monetary policies defined by the Bank of Mexico. What the federal government can do is supervise, so that sellers are not abusing prices; something that has not happened”, lamented Fernando Cruz, partner of GCMA.

“They are good intentions, but with few results,” he added.

So far this year, products such as eggs have risen in price by 24%; edible vegetable oil 12.46%; sugar 10.67%; lemon almost 50%; and potatoes have risen in price by 30%, details information from the Mexican Institute for Competitiveness (Imco).

Regarding the package of 24 products at a price of 1,080 pesos announced by the President of the Republic, Valeria Moy, director of Imco, acknowledged that the supermarkets complied with the large number of products offered by these chains, “you could lower the price of those 24 (products), because there are thousands of options to compensate for the loss that can be had in that set”, he explained.

The measure that did contribute to preventing higher inflation in the country was to subsidize gasoline and diesel, Moy pointed out.

The impact of this measure is limited, since there are those who stock the pantry in corner stores, in markets, markets on wheels (tianguis). “It is an insufficient issue at a global level to contain inflation,” added the manager of the GCMA.

It is important to remember that the issue of food production obeys seasonal issues; Agriculture is cyclical and depends on variables such as the cost of production. In the end, supermarkets determine prices. “There is an asymmetry between what the retailer buys and what they want, which is to maintain or increase their profit,” he explained.

What was missing?

In addition to opening up trade, the federal government should have put more effort into price supervision issues to avoid abuses of the final consumer.

In addition, taking into account that inflation has a greater impact on people with lower incomes, transfers would have been made to this sector of the population, as was done with the Oportunidades program.