Mexico: Consumer confidence continues to recover in March
April 5, 2017
Consumer confidence has continued to recover from the knock that it suffered in January on the back of a huge gasoline price increase. The unadjusted index of consumer confidence produced by the Statistical Institute (INEGI) rose from 75.7 in February to 81.0 in March. The increase overshot the 79.0 the markets had expected, suggesting that the earlier drop was short-lived.
Although still low, March’s improvement in consumer sentiment was broad-based. Households signaled that they were less downbeat regarding both their current economic standing and expectations of their economic situation in the next 12 months. In addition, consumers showed less pessimism about the country’s current economic situation and future economic expectations.
Earlier in the year, the sharp fall in consumer confidence was the result of a combination of factors. The most important factor weighing heavily on confidence was the sharp increase in gasoline prices announced by the government. Concerns regarding the U.S.-Mexico relationship under the new U.S. administration and the ensuing peso depreciation, together with low government popularity, also played a part. With the dust settling on several of these fronts, consumers also showed a higher likelihood of purchasing big-ticket items in March.
Author: Ricardo Aceves, Senior Economist