Will the 16 measures announced by the Government be able to curb inflation? Should the efforts of the President and his guests be applauded or should we wait to see the results? It is normal that the preparation of this package has generated expectations and it is also normal that its presentation has raised doubts. There will be no immediate results and perhaps we will not have something convincing either. AMLO was clear: we know that this does not solve the problem, but we could not remain with our arms crossed. We are facing a problem that can worsen, for which there are no easy solutions. An issue that is similar to other crises in which the population is still waiting for answers from the Government: insecurity, violence against women and supply of medicines.
Of the 16 measures, there are five that are directly related to consumer prices: the stabilization of the price of gasoline and electricity; the freezing of toll fees on highways; Telmex and Telcel’s commitment not to raise prices; the zero tariff for 21 goods of the basic basket and five imported inputs. Finally, the preparation of a list of 24 basic products that will have “agreement” prices, although no one has explained how this list and its prices will work. Macroeconomists are concerned about the cost of the measures and their impact on public finances. Ordinary people worry about what will happen to the price of the things they buy. For them, the key number is not the 7.7% of general inflation, but the 14% that the basic basket has risen. It is this “public” that the program has to convince and deliver results. We are talking about numbers, but above all about emotions. Failure to understand the program or its failure implies social risk. The commentocracy can wait.
Details are yet to be known, but with what has been said, it is clear that in this block of five measures, what will have the most impact in combating inflation is the subsidy or support for gasoline and diesel. It will follow the current strategy because the high price of oil allows it to be paid for. It is very expensive. It costs about 300,000 million pesos a year, but it lowers inflation by two percentage points.
The announcement of zero tariffs is interesting, because it will lower the price of some products such as chicken meat, beans and milk. It is worth clarifying that it seems that they were designed and drafted by a different team than the one that put the measures related to the promotion of national agri-food production in the agreement. The massive entry of tariff-free products will mean a blow to many national producers. Now the maximum tariff for beans is 45%; for chicken meat it is 75% and 20% for tuna.
What Telmex promises with its prices is relevant and so are those related to highway tolls, but they will not have an impact comparable to that of gasoline. Speaking of the 24 agreed basic products, the question remains whether it was intentional that the commitment was so meager in details: From when? In which stores? How will grocery stores and supply centers participate? What will happen to other presentations of those same products?
I stop at another package of measures, related to insecurity and inefficiencies. A commitment to put 12,000 police officers and 2,300 vehicles on the roads to improve safety; the announcement that costs and clearance times at customs and seaports will be reduced. These actions are included in the context of an anti-inflation program because there is a government recognition that insecurity is inflationary, as are corruption and inefficiencies in customs and ports. This triad, highways, customs and ports reminds us that not all the inflation we suffer is imported. Time is money. When bureaucracies waste time, they are spending other people’s money… us.
What does agile dispatch of cargo in ports mean, how are they going to measure it? What does the commitment to reduce costs and times in customs consist of? They are not questions to bother, but central issues to assess the seriousness of what was announced. In relation to road safety, why did they wait for the inflationary crisis to deal with a problem that affects not only the transport of goods, but also the mobility and well-being of people? Does this include the end of the tolerance of the occupation of toll booths and highways in states like Michoacán and Morelos?
Finally, we find a set of measures that have to do with incentives for rural producers. Inexplicably, Sembrando Vida is included among the programs that will contribute to combating inflation. More inexplicable is the reference to Segalmex, which seems more part of the problem than of the solutions. The President’s team is right to put the challenge of food security on the table, but it would be worth not mixing it with the fight against inflation. They are different challenges and require differentiated treatment.
. The Governor of the Bank of Mexico was missed in the presentation of the program. It is missed in the comments the day after it. Fighting inflation is his theme. This crisis is the opportunity to bring the central bank closer to ordinary Mexicans.
General Editorial Director of El Economista
Safe
Degree in Economics from the University of Guadalajara. He studied the Master of Journalism in El País, at the Autonomous University of Madrid in 1994, and a specialization in economic journalism at Columbia University in New York. He has been a reporter, business editor and editorial director of the Guadalajara newspaper PÚBLICO, and has worked for the newspapers Siglo 21 and Milenio.
He has specialized in economic journalism and investigative journalism, and has carried out professional stays at Cinco Días in Madrid and San Antonio Express News, in San Antonio, Texas.
