Mexico, the country with the lowest energy inflation in the OECD

Its food inflation is among the highest in OECD member countries
REUTERS/HENRY ROMERO - Refinería de petróleo de Tula de la empresa estatal mexicana Pemex, situada junto a la planta de energía de Tula perteneciente a la empresa nacional de electricidad Comisión Federal de Electricidad (CFE)

REUTERS/HENRY ROMERO  -   Tula oil refinery of the Mexican state-owned oil company Pemex, located next to the Tula power plant belonging to the national electricity company Comisión Federal de Electricidad (CFE).

Mexico was the country with the lowest inflation in the energy sector among the member countries of the Organisation for Economic Co-operation and Development in March. The North American country achieved a variation of only 5.3%.

The rise in energy prices in Mexico was well below the average inflation rate of the other 37 member countries, which achieved a price fluctuation of 33.7% in the same period of time. According to the OECD's expert economists, the general upward trend in prices in all member countries will have a significant impact on the rise in energy prices. In the monthly comparison published by the organisation, it can be seen that the most developed economies showed a greater fluctuation than other countries still in the process of economic development; the Netherlands has been placed as the country with the highest inflation in the OECD by registering an increase of 99.7% in energy prices.

REUTERS/HENRY ROMERO  -   El presidente de México, Andrés Manuel López Obrador, se dirige a la nación en el Palacio Nacional en la Ciudad de México
REUTERS/HENRY ROMERO - Mexican President Andrés Manuel López Obrador addresses the nation at the National Palace in Mexico City.

One step below the Netherlands, but also with galloping energy inflation, are Spain, where prices have risen by 60.9% in the last 12 months, and the United States, where prices have risen by 32% over the same period.

The President of Mexico, Andrés Manuel López Obrador, blames the maintenance of energy prices in comparison with other countries on the measures adopted by his government: "We have been able to maintain inflation without excessive growth because we took the decision to control fuel prices in time. This has allowed us to have lower inflation than in the United States, and this is clearly reflected in the energy component", according to the newspaper El Economista.

Food prices, Mexico's new challenge

In contrast to energy price inflation, Mexico has recorded one of the highest food price rises in the OECD. The country presided over by López Obrador is the eighth most expensive country on the shopping list, with a 13% increase in prices. This represents an increase of 3% compared to the average for the countries in the organisation. According to UN economists, countries with developing economies are more vulnerable to rising food prices, as they spend a larger share of their expenditure on food. Turkey is the country that has seen the greatest increase in the price of food baskets, with prices rising by more than 70%.

REUTERS/CARLOS JASSO - Vendedores en la Central de Abastos, en la Ciudad de México
REUTERS/CARLOS JASSO - Vendors at the Central de Abastos in Mexico City.

Faced with this situation, López Obrador yesterday announced new measures to control food prices, such as economic incentives for grain production and agreements with companies not to raise the prices of their products. According to what the Mexican president announced at a press conference, the aim of these measures, known as the "Package against inflation and high food prices", is to ensure that basic foodstuffs are fairly priced. "It is not about price controls, it is an agreement, an alliance to guarantee that the basic food basket has a fair price," said the president when he presented the new measures at the National Palace in Mexico City. The Finance Minister, who also took part in the press conference, assured that the main objective of the policies is to increase the production of basic grains in the country, such as corn, beans and rice, and to stabilise the prices of energy and fossil fuels. In addition, transport costs will not have an impact on the final price, as current toll prices will be maintained and tariffs on imported products will disappear.

Coordinator for the Americas: José Antonio Sierra