“The measures that were announced (by President López Obrador) have different horizons so that we could see an impact: some were faster to implement, such as the announcement of zero tariffs, and regardless of this measure, many of the products have increased of prices and we would have higher inflation if it had not been applied,” commented Janneth Quiroz, deputy director of economic analysis at Monex.
The economist highlighted that the elimination of tariffs, planned for the next six months, is one of the measures that has helped the most to contain inflation.
However, economists such as Jessica Roldán, director of economic analysis at Finamex, consider that the effects cannot yet be determined in the case of food, but in the measures applied for energy.
“The effect that will weigh the most is that of energy subsidies and it is not new, although it is part of PACIC, it brings its own dynamics,” he stressed.
Among the products that are in the PACIC, oranges, potatoes and box bread were the ones that have had the greatest increase in their prices, as shown in the table below.
Annual inflation for May registered a slight downward variation, standing at 7.65% from 7.68% in April. In the monthly comparison, inflation had an increase of 0.18% in May compared to April.
Quiroz stressed that the food production measures as well as the delivery of fertilizers will be the ones that will take time before they are reflected in inflation.
The Monex economist stressed that the increase in food prices will not subside until foreign affairs are resolved, such as the conflict between Russia and Ukraine, as well as the slowdown in supply chains due to the confinements in China.
“It is taking time (to control inflation), since many of the price pressures continue to come from abroad and from a global shortage; if this continues, international prices will continue to increase,” he added.
The armed conflict is expected to last up to two years, causing food shortages and putting pressure on prices.
To continue fighting inflation, analysts say that the Bank of Mexico (Banxico) will have to increase the reference rate by 75 basis points at its next meeting on June 23.
It is estimated that the rate will reach levels above 9%, a level never seen before.
