Mexico: Consumer confidence rises marginally in March
April 8, 2016
Consumer confidence among Mexican individuals rose timidly in March after having fallen to the lowest level in two years in February. According to the unadjusted index of consumer confidence elaborated by INEGI, consumer sentiment rose from 88.7 in February to 89.2 in March. The increase, however, undershot the 91.2 the markets had expected.
Looking at the sub-indices that compose the overall indicator, the sub-component that measures households’ current economic situation stabilized at February’s level in March. Moreover, the sub-index of consumers’ perception regarding the country’s current economic situation increased marginally over the previous month. Although weak confidence persisted regarding the current economic scenario, the recent strengthening of the peso as well as an improvement in oil prices likely had a positive impact on consumers’ mood in March.
That said, the sub-indices that measure expectations were dismal. Households’ own economic expectations in the next 12 months decreased notably in March, falling to the lowest level in more than two years. Also, the perception regarding national economic prospects plummeted to the lowest level since October 2008. Consumers’ deteriorating expectations can be attributed to increasing concerns regarding still low oil prices and its impact on public finances and, hence, on the economy.
Yet it is worth mentioning that despite the recent weak levels of consumer confidence, consumer fundamentals are strong, with employment growing, real wages rising and remittances and credit expanding at a robust pace.
Author: Ricardo Aceves, Senior Economist