MEXICO CITY – Mexico will waive import duties for one year on a range of household staples, most of them foodstuffs, in a bid to curb inflation, the government said on Monday.
The government unveiled the plan in its official gazette after earlier this month agreeing with businesses to increase production of staples such as corn, rice and beans to control inflation, which is at an over two-decade high.
The products on the government import list included corn oil, rice, tuna, pork, chicken, beef, onions, jalapeño peppers, beans, corn flour, wheat flour, eggs, tomatoes, milk, lemons, white corn, apples, oranges, wheat and carrots.
Bread, potatoes, pasta for soup, sardines, sorghum and hand soap were also listed in the government decree. Duties would also be suspended on imports of live cattle, pigs, sheep, goats and chickens, it said.
Banco Base economist Gabriela Siller said the impact of the measures on inflation would likely be modest, because the items exempted amounted to about 11.4% of the consumer price index. It would, however, increase pressure on public finances, she said.
Combined with fiscal support from the government to keep fuel prices down, Siller estimated the measures amounted to a sum roughly equivalent to 2% of gross domestic product.
The government said the waiver on the household staples would take effect from Tuesday and be in force for a year. The waiver on livestock would enter force pending the approval of Mexico’s foreign trade commission, it added.
The measures could be extended for another year, it added.
(Reporting by Dave Graham in Mexico City; Editing by Jason Neely and Matthew Lewis)