The president of the Employers’ Confederation of the Mexican Republic (Coparmex), José Medina Mora, acknowledged the federal government’s willingness not to implement price controls as the main strategy to combat inflation.
The employer leader recalled that inflationary factors are mainly driven by international events, such as the pandemic, the breakdown of supply chains, the armed conflict between Russia and Ukraine, and the collapse of the port of Shanghai, which is the most important freight terminal. of the world.
Regarding the Package Against Inflation and Fars, he considered regulatory simplification and the reduction of transaction costs as a key issue for the business sector, such as the exemption of the Carta Porte by the Tax Administration Service (SAT) to basic goods and supplies in its transport and the reduction of costs and customs clearance time, which are affordable actions for the government “and we also believe that it is in that direction that Mexico must walk if we want to advance towards a more competitive economy in the international context.”
The impact. The 24 items of the basic basket that were included in the package represent 46 percent in food inflation, according to the Ministry of Finance.
TRADERS MUST JOIN
Héctor Tejada Shaar, president of the Confederation of National Chambers of Commerce, Services and Tourism (Concanaco Servytur), invited merchants and service providers to join the actions aimed at combating inflation, in order to strengthen consumption and, therefore, reinforce the growth of the tertiary sector, which is the engine of the economy.
The business leader trusted that the Pacic will help ensure that the basic food basket has a fair price.
In addition, he acknowledged that the plan additionally proposes fiscal, administrative and foreign trade measures to contain not only inflation, but also accelerate domestic consumption and the creation of new economic units.
THERE WILL BE MORE STRATEGIES
The president of the Confederation of Industrial Chambers, José Abugaber, announced that in parallel with the negotiations to establish the Pacic, the businessmen and the government will establish working groups to implement strategies in order to increase the production of grains and fertilizers in the national territory and thereby deal with the inflationary impact from abroad.
He added that the Pacic aims to support Mexican families, so it has the consensus of the industrialists and the business union, so the plan should only cover products from the basic basket, which is where inflation has had the most impact. .
LESS REGULATORY BURDEN
The National Chamber of the Transformation Industry of Nuevo León called for, in addition to the Pacic, the government to resort to other mechanisms such as alleviating the regulatory burden on companies.
For example, through a lower tax and regulatory burden for the productive sector, in standards, procedures and inspections.
He also considered that it is imperative to stop the escalation of prices in the short term, which affects not only companies but Mexican society in general.
If actions are not taken, it will be difficult to achieve greater economic development and social welfare. For Caintra, one of the main obstacles for industrialists has been high inflation.
NO IMPACT ON PUBLIC FINANCES
The Undersecretary of Expenditures of the Ministry of Finance and Public Credit (SHCP), Juan Pablo de Botton Falcón, assured that the government’s anti-inflation program will not have any impact on public finances.
He explained that the resources for its implementation are available in the budget for this year, without affecting the public treasury.
“All these resources were available in the budget and its correct exercise and orientation, which allows us to allocate around 1.4% of GDP to the program without this having in any way a deterioration in public finances,” the official said before the voices of analysts who point out that it erodes public spending.
IT IS SEEKING TO KEEP THE PRICES
Tatiana Clouthier, head of the Ministry of Economy, commented that the prices of the products of the basic basket will not decrease, but that they are sought to be maintained with the Pacic, which will prevent the inflationary effects from continuing to affect the income of the families.
He explained that there will be work groups to review the problems of each of the 24 products of the basic basket so as not to add costs to the final price of the products. In addition, he announced that about 21 tariff fractions of supplies and products will be withdrawn so that within a month at the latest there will be a reflection of the program in prices.
CONSENSUS AND DIALOGUE, KEYS: STPS
Consensus, dialogue and the establishment of mutual agreements is the way forward to address the inflation of the basic food basket that affects the poorest, as has been shown by the commitments made between the federal government and the business sector, said Luisa María Mayor Luján, Secretary of Labor and Social Welfare during the Concamin’s 2022 Industrial Meeting.
In the same way, he stressed that the rescue of authentic collective bargaining is a key piece for strong companies and workers. “We have been making progress in the implementation of this reform that guarantees freedom, democracy and labor justice. We believe it is important that all businessmen and industrialists get more and more involved in the protection of these rights”, he said.
WILL HAVE LIMITED EFFECTS: BBVA
The Package against Inflation and Fars presented by President Andrés Manuel López Obrador will have limited effects, considered the chief economist of BBVA Mexico, Carlos Serrano.
“We are in an environment where it will be very difficult to reduce inflation because it is coming from abroad. We acknowledge the efforts to try to attack the problem. All the countries of the world are looking for it and it is not being achieved because it is very complicated,” he said.
The specialist stressed that the announced plan is not a generalized price control measure, which would also be complicated in an open economy like Mexico’s, where a large part of the inputs come from abroad.
He added that there are measures in the plan on the supply side, such as improving distribution logistics and lowering tariffs on many goods.
TRANSIENT EFFECT: JP MORGAN
JP Morgan considered that the plan to counteract inflation will have a limited effect, both on prices and on economic distortions and fiscal pressures. “The limited and likely transitory effect on prices implies that, at best, inflation expectations will be only modestly affected,” he said.
He noted that some of the key basic products that are included in the government’s strategy have already increased prices in recent months, so they may not change until the end of the year.
In the presentation of the plan, Liliana Mejía Corona, Global Vice President of Corporate Affairs of Grupo Bimbo, stated: “Today, Grupo Bimbo voluntarily joins this initiative in favor of the economy of Mexican families.”