Mexico’s household consumption shows its worst figure in 10 years

Inegi reported that this indicator registered an advance of 0.28% at an annual rate in the fifth month of the year.

The consumption of Mexican households registered an advance of 0.28 percent at an annual rate during May, well below the 1.24 percent growth observed in April, the National Institute of Statistics and Geography (Inegi) reported.

According to the statistics agency, the expenditure that Mexican families made in consumer goods and services were the lowest for a month of May since 2009, the year in which Mexico suffered the global economic crisis.

In addition, household spending was at its lowest level since the administration of Ernesto Zedillo, as the accumulated growth during the first five months of the year showed a dynamism of 1 percent, lower than the six-year period start of the Peña Nieto administration (1.7 percent), Felipe Calderón (3.1 percent) and Vicente Fox (3.7 percent).

The weakness of consumption could be noticed both in the local and foreign markets.

First, the spending on goods and services of national origin grew at a rate of 0.36 percent per year, which represented a slowdown with respect to the 1.09 percent advance reported during the previous month.

Specific figures revealed that spending on goods showed a slight growth of 0.07 percent per year, while services advanced 0.72 percent based on figures adjusted for calendar effect.

On the other hand, the acquisition of imported goods registered an expansion of 0.69 percent, a figure that shows a decrease compared to the month of April.

In the monthly variation, household spending reflected a 0.2 percent drop based on seasonally adjusted figures, largely due to a 1.8 percent decrease in consumption of imported goods and a stunted 0.1 percent increase in goods and services of national origin.

Invex Financial Group analysts considered that the growth of this indicator has been weak during the first months of the year, which shows that consumers are being cautious in their decisions due to a high level of uncertainty in the economic environment.

“If consumers remain cautious in the expenditure of goods and services, a strong impact on aggregate demand could be generated, which would result in lower growth rates on the national economy,” said the financial institution.

The Monthly indicator of Private Consumption in the Internal Market allows monitoring of the most important component of the Gross Domestic Product on the demand side.

The Yucatan Times Newsroom with information from El Financiero

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