Peru: Consumer confidence slips in January
February 4, 2011
The consumer confidence indicator (INDICCA) published by APOYO Consultoria dropped 4 points to 54 points in January. Consumer confidence dropped after having reached the highest level in more than three years in December 2010. Despite the drop, the index remains above the 50-point threshold that separates optimism from pessimism. The fall in consumer sentiment was broad-based, as respondents to the survey were less optimistic about the current economic situation and future economic prospects. By socio-economic level, consumer confidence dropped in four of the five levels, with the lower socio-economic levels registering the sharpest falls. In addition, the sub-index of prices, which measures consumer's perceptions of increasing prices at the moment and in the near future, fell from 60 points in December to 53 points in January, suggesting that consumers perceived higher prices in January and expect prices to increase in the coming months. Consequently, households, in particular low-income households, are less likely to embark on home improvements or buy major durable goods, with the sub-index of housing dropping over the previous month. The fall in consumer sentiment also reflected worsening expectations amongst consumers regarding their ability of finding a job during the year ahead.
Author: Ricardo Aceves, Senior Economist