Mexico: Consumer confidence plunges to three-year low
December 4, 2013
Confidence among Mexican consumers decreased for the fourth consecutive month and now sits at its lowest level since November 2010. The unadjusted index of consumer confidence published by the national statistical institute (INEGI) fell from 91.2 points in October to 88.7 points in November. The decrease in consumer sentiment contrasted market expectations of an increase to 92.0 points.
November's plunge reflects consumers' more pessimistic views regarding the future situation of the country's economy as well as the outlook for their own economic prospects. Their pessimism is mainly the result of the impact of the fiscal reform and the tax hikes that will take place next year. Moreover, households' perceptions regarding their current economic situation and the country's overall economic situation also deteriorated over the previous month, reflecting the anemic condition of the economy and the labor market.
LatinFocus Consensus Forecast panelists expect private consumption to grow 2.8% this year, which is down 0.4 percentage points from last month's projection. For next year, the panel sees private consumption expanding 3.9%, which is down 0.2 percentage points from last month's estimate.
Author: Ricardo Aceves, Senior Economist