Generalized price control should be avoided; target some products and social groups, suggests Monex

A price control discourages the growth of companies and what should be sought is that the products that will be offered with the pact between the government and the companies are focused on the segments of the population with fewer resources.

Carlos González, director of economic analysis of the bank Monex He believed that the best thing is the free market and a price control as such, discourages production, general shortages and a black market.

In an interview, the expert on economic issues explained that in the reports of the companies in the national stock market, it has been seen that the margins, the profits of the companies decreased due to a significant growth in the cost of inputs, specifically the price of energy and grains.

“We have to remember that it is not just a problem for Mexico. After the pandemic there was an increase in people’s consumption, demand grew and supply did not grow at the same rate, in addition to affecting the war between russia and ukraine”, he added.

Nothing is known about the agreement yet, but what we can see is a kind of pact, as there was in other administrations, to help vulnerable groups of the population, very focused aid.

The Monex manager recalled that the fuel price subsidydoes not help the most vulnerable groups in the country and is also unsustainable for public finances.

What we can see from my point of view, is like in other years, businessmen who place products that support certain groups in need, with certain products focused on what they will be helped with, but nothing generalized”, he commented.

Otherwise, as the aid is generalized, which will cause companies to earn less, have less incentive to produce, generate shortages and may face a black market for certain products.

González explained that when these types of controls are put in place, someone has to pay for them, be it the government through subsidies, companies with fewer utilities, or final consumers.