Mexico: Confidence among consumers wanes in April
May 6, 2016
Consumer sentiment fell in April, losing part of the ground gained in the previous month. According to the unadjusted index of consumer confidence elaborated by INEGI, consumer sentiment edged down from 89.2 in March to 88.9 in April. The result disappointed analysts, who had seen sentiment gaining traction and the index rising to 90.1.
The fall was mainly the result of consumers’ more pessimistic views about the current situation. Confidence regarding their own economic situation fell to a 14-month low and their assessment regarding the country’s current economic situation dropped to an eight-month low. Meanwhile, the sub-gauges of consumers’ expectations for the next 12 months send mixed signals. While households’ expectations regarding own their economic situation improved marginally in April compared to the previous month, their assessment regarding the future state of the economy worsened notably. The sub-index of the country’s economic expectations fell to a low that was last registered in October 2008, when the global financial crisis was about to hit the Mexican economy. 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.
It is still 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