Mexico Consumer Confidence Tumbles to Lowest Level Since 2010by
Sentiment tumbled as peso weakened to record low in September
Private spending has been boosting economy amid low oil prices
Mexico’s consumer confidence fell to the lowest level since the aftermath of the 2008-2009 financial crisis, suggesting a pickup in retail sales may be short-lived.
The index fell to 84.1 from 86.5 the month before, the national statistics institute said Thursday in a report on its website. Confidence was lower than projected by any of the nine economists surveyed by Bloomberg, who had a median forecast of 86.5.
Sentiment plunged as the peso slumped to a record low of almost 20 per dollar on Donald Trump’s improved standing in the U.S. presidential election, a widening current-account gap and deteriorating public finances. The central bank raised its key rate last week to the highest level since 2009 amid concern that currency weakness may accelerate inflation and threaten to roil the nation’s financial markets.
"The drop in confidence is probably related to the recent deprecation of the peso," said Marco Oviedo, the chief Mexico economist at Barclays Plc. "Consumers feel that their income in dollars is being hit, and that has an impact on perceptions of purchasing power."
Private consumption has been one of the pillars of the Mexican economy this year amid government spending cuts, low oil prices and weak exports. The sentiment number adds to concern that spending may be slowing after same-store retail sales, as measured by the Antad trade group, rose just 1.7 percent in September, less than the 3 percent median forecast and the least since the end of 2014.