Mexico’s consumer sentiment continues to be stagnant; consumer spending likely to peak in 2016

Consumer sentiment in Mexico continues to be low and stagnant, contradicting the robust growth in consumption. Even if the non-adjustment index indicates that the consumer sentiment rebounded slightly in the first half of this year from the levels seen at the end of 2015 (93.47 from 92.99), the seasonally adjusted variant indicates certain decline in the same period (90.99 from 91.87), said Societe Generale in a research report.

Overall, consumer confidence has been stagnant in the last three years. This scenario is not seen in the surge in consumer spending and the moderate slowdown in the jobless rate. Robust consumer spending is mostly illustrated by the subdued inflation and the stagnant sentiment possibly reflects the belief of consumers that the scenario would not last too much longer. This is more or less in line with the outlook of economic growth as well.

“We see the economy and consumer spending peaking this year followed by growth moderation in 2017,” added Societe Generale.