Efforts to Tame Inflation
Mexico City — In a concerted effort to tackle inflation, Mexico’s major food retailers have committed to sustaining the pricing agreement with the government. The initiative aims to limit the prices of 24 essential food items. By upholding this agreement, retailers are playing a crucial role in stabilizing the economy, according to a government official who made the announcement on Monday.
Extending the 2022 Pricing Agreement
President Andres Manuel Lopez Obrador expressed his desire to extend the 2022 pricing agreement as a means to control inflation further. With the escalation of inflation reaching unprecedented levels in Latin America’s No.1 economy, maintaining price stability is more crucial than ever. The commitment made by food retailers to continue adhering to the original Pricing Agreement for Consumer Staples in Mexico (PACIC) further solidifies their dedication to supporting the government’s efforts.
Safeguarding Essential Food Staples
The PACIC, established in 2022 when inflation soared to its highest level in 20 years, acts as a safeguard for essential food staples like corn, a primary ingredient in tortillas. By implementing measures to protect the prices of these staple products, Mexico can ensure that citizens have continued access to basic necessities. In a time of economic uncertainty, this provides stability for consumers and contributes to the overall well-being of the nation.
Benchmark Interest Rise
While food retailers are taking proactive steps to aid inflation control, the central bank of Mexico has made its own move by raising the benchmark interest rate to a historic record of 11.25%. This change, implemented in March, represents a commitment to manage inflation effectively. By keeping the interest rate at this level, the central bank aims to strike a balance between economic growth, stabilization, and the need for price control.