Mexico enlists private sector to help tame inflation

Mexico announced Wednesday a settlement with contributors of the private sector aimed toward keeping fees of staple ingredients in the face of the best inflation in two many years.

“This isn’t always about price controls. It’s an agreement, an alliance to guarantee that the basic meals basket is priced fairly,” President Andres Manuel Lopez Obrador instructed journalists.

The non-binding pact is designed to keep prices of basic foods stable for at least six months, Finance Minister Rogelio Ramirez de la O said.

Baked goods giant Bimbo pledged to maintain the price of white bread.

Telmex, the communications giant owned by tycoon Carlos Slim, promised not to raise telephone and internet prices this year.

Like many countries, Mexico is facing a sharp rise in consumer prices that is pushing up the cost of living.

Mexican inflation hit 7.45 percent in March, well above the central bank’s target of around 3.0 percent.

Mexico already subsidizes fuel, using money generated by its oil and gas industry, without which inflation would be around 10 percent, Ramirez de la O said.

The measures presented by the government also aim to boost the production of corn, rice and beans to prevent any shortages.

Two million more tons of fertilizer — a product facing a supply squeeze because of the war in major producer Ukraine — will be distributed to the agricultural sector.

The government said it would boost road security to prevent food theft and pledged not to increase tolls and rail transport fees.

The Mexican relevant bank has raised its benchmark interest rate at seven consecutive conferences, to 6.5 percent, in an try and rein in soaring customer charges.

With issues mounting about inflation and a weaker US boom, the Bank of Mexico downgraded its monetary outlook in March, forecasting a boom of 2.4 percent this yr.