Consumption profiles slowdown for the end of the year: CEESP

The private sector anticipated that consumption points to a slowdown at the end of the year, after the downward reflection on the sales forecast expected during the Good End 2022.

The Center for Economic Studies of the Private Sector (CEESP) referred, based on the data published by the Inegi on private consumption, sales with credit and debit cards “do suggest a slowdown in consumption in the last days of the year, which would be consistent with the expectations of low economic dynamism for 2023”.

The private body agglutinated in the Business Coordinating Council (CCE), pointed out, as a precaution, “it must be noted that the amount operated with cards is not an exact predictor of consumption and anticipate the behavior of December as a whole with its data from the first week is still premature.”

Consumption is an indicator that reflects the mood and dynamism of the economy as a whole. It is related to “consumer confidence”, that is, what households expect about their economy. Analysts mentioned that to the extent that their future expectations are positive -of better income, employment or business- it is likely that their consumption will be better today and vice versa. “Naturally, consumption is also influenced by contemporary factors such as the availability of jobs and the income of the self-employed or employed. These, in turn, depend on the dynamism of the general economic activity”, said the CEESP.

However, while the forecasts of several economic indicators show recent improvements for the end of the year, “it seems that there are signs that suggest a new stagnation,” warned the private sector.

The private consumption indicator (ICP) published by the Inegi is only available to September at this time, pointed out the CEESP, which shows a reasonably favorable evolution in its sequential evolution -month by month-, accumulates three consecutive months with upward variations and its level is already almost 4% higher than that prior to the pandemic.

The timely estimates of the Inegi foresee that in October and November the indicator had substantial annual growth (above 6%), but an implicit sequential growth in November was negative, -0.7%, compared to October.

Last week, the Ministry of Economy reported on the sales of the Good End, which were below the initial projection of reaching 195,000 million pesos. Which means that the consumer was more cautious about their purchases, given the growing inflation and the uncertainty about what will come in 2023.

lilia.gonzalez@eleconomista.mx