Peru: Consumer confidence improves in May despite electoral uncertainty
June 7, 2011
The consumer confidence indicator (INDICCA) published by APOYO Consultoria rose from 53 points in April to 55 points in May, pushing the indicator further above the 50-point threshold that separates optimism from pessimism. The improvement in consumer sentiment was broad-based, reflecting consumers' more positive assessment of the current economic situation and future economic expectations. Consumer confidence improved in all five socioeconomic categories, but was particularly evident amongst those at lower socioeconomic levels, despite an environment of higher prices and electoral uncertainty. Moreover, the rapid rise in food and fuel costs added to consumers' uncertainty of increasing prices, with the sub-index of current prices deteriorating further and remaining in pessimistic territory for the fifth consecutive month, suggesting that consumers continued to perceive higher prices in May. In contrast, the sub-index of future prices improved over the previous month, suggesting that consumers anticipate lower prices over the next 12 months. Furthermore, households' intentions regarding the future purchase of major durable goods improved over the previous month, suggesting positive conditions in consumer demand over the coming months.
Author: Ricardo Aceves, Senior Economist