Mexico's retail sales maintains a solid pace

Mexico's retail sales increased 0.5% m/m sa in July as a result of the expansion in food, hardware and apparel sales partially offset by lower supermarket, domestic equipment and paper and entertainment sales.  In annual terms, retail sales increased 5.8%, the highest annual expansion since February 2012.

The print suggests that the domestic market might maintain momentum in Q3. The GDP proxy of July is set to expand by 0.4% m/m sa -which is to be reported tomorrow- and this figure supports the forecast.

"We believe that the economy might start to decelerate in Q3; however, this could occur in later months as inflation is at historical lows, real wages are recovering and employment continues growing (0.3% m/m sa in August), supporting the stabilization of the domestic market.  In fact, ANTAD same store sales increased 1.0% m/m sa in August in real terms", says Barclays