(Bloomberg) – Mexico is considering increasing corn imports and limiting gas prices as an inflation spike hits prices for tortilla, a staple in the country.
Inflation in Latin America’s second-largest economy accelerated to about 6% in the second quarter, driven by fuel and food prices. This prompted the central bank to raise interest rates by a quarter of a point last week, surprising economists, who expect inflation to slow to just 5.58% by the end of the year.
“There are many ways to be in control. In the case of gas, if necessary, we will establish a maximum price. The technocrats are not going to like it, ”President Andrés Manuel López Obrador said on Friday, referring to measures to combat inflation. “In the case of tortilla, there are other mechanisms, for example, opening up imports so that there is more competition.”
The president, known as AMLO, had previously promised not to allow gas and electricity prices for consumers to rise beyond the average inflation rate. But the liquefied petroleum gas that Mexican households use for cooking has been one of the biggest and consistent contributors to inflation this year. And tortilla prices rose 2.6% in May compared to the previous month.
“Foreign investment is growing, the economy is recovering, jobs are recovering, the only thing that concerns me is inflation, that we keep inflation under control because we have external pressure. A lot of money is being released in the United States, ”AMLO said at his daily press conference.
The president also argued that Mexico was not self-sufficient in the production of the yellow corn necessary for the tortilla, which caused price variations. He added that, especially in places like Mexico City, monopolistic practices had raised the price of cooking gas, a practice that he said the government will fight.
Original Note: Tortilla Price Spike Leads Mexico to Mull Boosting Corn Imports
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