Overview and Background
The Mexican consumer confidence saw a significant improvement in July, following a sharp decline the previous month, according to data released by Mexico’s National Institute of Statistics and Geography (Inegi).
Who is Inegi?
The National Institute of Statistics and Geography (Inegi) is Mexico’s official statistics agency, responsible for collecting, analyzing, and disseminating statistical data about the country’s economy, society, and environment. Inegi collaborates with Banco de México (Banxico) to produce the Indicator of Consumer Confidence (ICC).
July’s Improvement in Consumer Confidence
In July, the ICC reported a score of 45.9 points on a seasonally adjusted basis, marking a 0.4-point increase compared to the previous month.
- This improvement comes after a 1.0-point decline in June, making July the second month of gains this year.
- However, annual comparisons show a 1.2-point decrease, marking the seventh consecutive monthly decline.
Three out of five components of the ICC showed growth in July, according to Inegi’s report:
- Purchase possibilities of furniture and home appliances: This component increased by 2.5 points, aligning with the convergence of inflation towards Banxico’s target of 3% ± 1 percentage point.
- Current economic situation of the country: This component grew by a modest 0.1 points.
- Economic situation of household members: Also increased by 0.1 points.
Despite these positive signs, there were still areas of concern:
- Expected economic situation of the country: This component declined by 0.3 points.
- Expected economic situation of household members: Deteriorated by 0.2 points.
Economic Context and Impact
While Mexico’s economy has avoided a technical recession, growth projections indicate a moderate expansion well below the government’s estimate between 1.5 and 2.3 percent.
Private sector experts predict a 0.20% growth for this year, according to a Banxico survey.
Key Questions and Answers
- Q: Who is Inegi? A: The National Institute of Statistics and Geography (Inegi) is Mexico’s official statistics agency responsible for collecting, analyzing, and disseminating statistical data about the country’s economy, society, and environment.
- Q: What does the ICC measure? A: The Indicator of Consumer Confidence (ICC) measures Mexican consumers’ optimism regarding the current and future economic conditions of the country and their households.
- Q: Why is consumer confidence important? A: Consumer confidence is a crucial economic indicator that reflects consumers’ expectations about their financial situation and the overall health of the economy, influencing spending habits and driving economic growth.
- Q: How does the recent improvement in consumer confidence compare to previous months and years? A: July’s 0.4-point increase follows a 1.0-point decline in June, marking the second month of gains this year. However, annual comparisons show a 1.2-point decrease, the seventh consecutive monthly decline.
- Q: What do the component increases and decreases indicate about Mexico’s economic outlook? A: While purchase possibilities of furniture and home appliances show growth, expected economic situations for both the country and household members have deteriorated. This mixed signal suggests a cautiously optimistic outlook for Mexico’s economy.