Mexico has announced plans to increase the production of staple foods such as corn, rice and beans in order to combat consumer price inflation.
Finance Minister Rogelio Ramirez de la O announced the decision, agreed in conjunction with business leaders, at a news conference alongside President Andres Manuel Lopez Obrador, who also gave his support to the plan.
Whilst the government has decided to stop short of implementing price controls, Lopez Obrador said that the initiative would see staple foods remain affordable for regular households. Consumer price inflation in Mexico is at a two-decade high, reaching 7.72% in the first half of April.
Ramirez said that he expected the plan to have a near-term impact on inflation expectations for basic goods. The increase in production will initially last for six months, and could be extended if necessary.
The move appears to be popular with business leaders, with billionaire Carlos Slim, Mexico’s richest man, publicly backing the plan along with a statement from food manufacturer Grupo Bimbo. Lopez Obrador said that Mexican supermarket chains Chedraui and Soriana had also expressed their support.
The newly-announced initiative is not expected to impact a decision set to be made on interest rates by the central bank next week, with the majority of analysts projecting a rate hike of 50 basis points.