One of Mexico’s most renowned economists is predicting Mexico will reach a 10 percent inflation rate by the end of the year, which would be “disastrous and could lead to famine in some parts of the country.”
Enrique Rovirosa Miramontes, who leads a college of economists in Baja California, claims seven out of 10 residents in Mexico are already having a hard time keeping up and not being able to afford the cost of food and bare necessities.
Due in part to this prediction and others like it, some banks in Mexico have begun working with the Mexican government to limit inflation.
“The entire world knows if inflation goes uncontrolled like we’re seeing now, it will have a lot of negative and serious effects in our country’s economic growth and others that depend on it,” said Agustín Carstens, director of Mexico’s Bank of International Payments.
For Carstens, the best-case scenario right rests on Mexico’s economy, which grows by only 1.5 to 1.7 percent.
As for the state of Baja California, directly south of California, Rovirosa Miramontes is reporting inflation currently sits at just under 9 percent for the month of June.
But Carstens warns prices for basic foods are spiraling upward by more than 13 percent.
Rovirosa Miramontes and some of his colleagues have been tracking the cost of 21 basic food products since the beginning of the year.
They discovered avocados and eggs have soared in price by 95 pesos per kilo, or $4.75.
Items such as white potatoes have also gone up by $.60 per kilo with milk costing $.50 more per liter (a liter is a bit more than a quart of a gallon).
Other products such as cooking oil, tomato paste, chicken breast, beans, refined salt, corn tortillas and a loaf of bread have also jumped in price.
These economists also looked at energy and fuel prices and discovered additional costs for consumers.
They discovered the price of liquid gas, used in stoves, is up 18.5 percent since January.
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Electricity, which increased in price by 27 percent in 2021, is up another 13 percent this year already.
Rovirosa Miramontes warned Mexico’s anti-inflation programs are failing and famine in some areas of the country is a real possibility.
“Nothing has worked, policies have been inefficient, the government needs to step in with subsidies,” he said.
He also believes Mexican President Andrés Manuel López Obrador needs to increase interest rates as a way to “slow down inflation.”
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When Biden cut back on oil production in the U.S. and ensured there was no glut of oil on the market it cemented in a trickle down effect of higher cost of everything. If America had stayed energy independent it would have not have added to the strain on world oil production.