Argentina Consumer Confidence May 2017

Argentina

Argentina: Consumer sentiment deteriorates slightly in May

May 23, 2017

In May, the Universidad Torcuato di Tella (UTDT) consumer confidence index dipped from 46.2 in April to 45.8. As a result, the index moved slightly further from the 50-point threshold that separates pessimistic from optimistic sentiment. Consumer confidence has been negatively affected by the Macri administration’s reforms, which, in order to fix the numerous imbalances stemming from the previous administration’s economic policies and give the country a more stable policy framework, have resulted in job cuts and a high rate of inflation. Moreover, April’s rate hike by the Central Bank could have weakened consumer sentiment further, by acting as a sign that authorities are facing difficulties in keeping prices under control.



In May, consumers were slightly more optimistic about their current financial situation than they were last month, and became more willing to make major purchases, boding well for private consumption. However, while their assessment of their personal situation compared to one year ago improved significantly, consumers’ outlook regarding their future financial situation deteriorated somewhat, contrasting the strong improvement registered in April. In addition, households’ assessment of both the country’s short- and long-term macroeconomic prospects weakened considerably, with both sub-indicators deteriorating at the fastest rate in three months.

Panelists surveyed for the LatinFocus Consensus Forecast see private consumption rising 2.9% in 2017, which is unchanged from last month’s forecast. For 2018, panelists expect private consumption to increase 3.0%.


Author: Massimo Bassetti, Economist

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Argentina Consumer Confidence May 2017

Note: Monthly consumer confidence index. Values above 50 indicate an optimistic assessment in consumer sentiment while values below 50 indicate a pessimistic assessment.
Source: Universidad Torcuato di Tella (UTDT).


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