Consumer confidence rose 0.3% in May

Consumer confidence registered a slight increase in May of 0.3 points compared to April, revealed data from the National Institute of Statistics and Geography (Inegi) and the Bank of Mexico (Banxico).

The sentiment of Mexicans, measured through the Consumer Confidence Indicator (ICC), stood at 44.4 points. On a year-over-year basis, this represented only a slight increase of 0.8 points.

According to data from Inegi and Banxico, monthly growth was observed in May in the five components that comprise it.

The item that measures expectations about the expected economic situation of household members within 12 months, compared to the current one, rose only 0.1 points. In turn, the section that evaluates the economy they receive in their homes compared to what they had a year ago increased 0.3 points.

The autonomous body specified that the indicator that captures the expectations about the expected economic condition of the country within a year with respect to the current situation increased monthly by 0.1 points in May; while in its annual comparison it decreased 0.6 units.

Meanwhile, the variable that measures the perception of consumers about the economic situation of the country today compared to what prevailed 12 months ago grew 0.7 points per month, and reported a rise of 2.5 at the annual rate.

The possibilities at the present time of the members of the household, compared to those of a year ago, to make purchases of furniture, television, washing machine, other household appliances, among others, also rose 0.7 points at the monthly rate and 2.2 at the annual rate.

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On May 24, the Inegi reported that the inflation Mexico’s general decelerated in the first half of May more than expected by economists and reached its lowest level in 20 months, standing at 6.0% year-on-year after the drop. However, it is still above Banxico’s target of 3% +/-1 percentage point.

In turn, inflation underlying, Considered a better parameter to measure the trajectory of prices because it eliminates high volatility products, it also cooled more than expected to 7.45%, its lowest level since May 2022, spinning seven consecutive fortnights in decline.

Last week, the Bank of Mexico raised its growth forecast to 2.3% gross domestic product (GDP) for the country at the end of 2023 from a previous forecast of 1.6% in the face of better-than-expected growth in the first quarter.

The central bank also expects annual headline inflation to have already passed its “peak” in the first quarter of this year, when it averaged 7.5%, before declining for the remainder of 2023.

Even so, he maintained that inflation would not reach levels close to 3%, Banxico’s goal, until the fourth quarter of 2024.

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