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.