Mexico: Consumer sentiment remains virtually unchanged in September
October 6, 2015
Confidence among Mexican consumers remained virtually unchanged in September. According to the unadjusted index of consumer confidence elaborated by INEGI, the indicator edged up from 90.4 in August to 90.6 in September. The reading nonetheless, disappointed the markets as they had expected the indicator to increase to 91.4.
INEGI reported that households were slightly more optimistic regarding the current and future national economic situation. However, the survey from September showed that consumers were more pessimistic regarding their own personal economic situations as well as their own economic expectations in the next 12 months. Analysts suggest that although consumer confidence has been weak in recent months, consumer fundamentals remain solid. Inflation is currently hovering at all-time lows and indicators concerning the labor market point to healthy labor conditions. Moreover, recent data showed that growth in retail sales remains solid. Retail sales increased 5.8% annually in July (June: +5.4% year-on-year), which marked the fastest pace in more than three years.
The weakness in sentiment is attributed to some extent to the peso’s depreciation, which consumers tend to associate with a deteriorating economic outlook given the history of economic crises in the country.
Author: Ricardo Aceves, Senior Economist