Mexico’s consumer confidence likely to have risen slightly in May; but expected move downtrend

Mexico’s consumer confidence index is expected to have risen slightly in May. It is likely to have increased to 89.2 from April’s 88.9, said Societe Generale in a research report. However, the seasonally adjusted variant is expected to have dropped to 89.1 from 89.4. With the continuous increase in consumer spending and the low inflation, the lower confidence level is likely reflecting the slowdown in economic growth and worsening of perception of business conditions.

Moreover, the stagnation of labor market in the past year has also depressed the sentiment. The economic growth is unlikely to accelerate given the situation of global growth. This is expected to maintain consumer sentiment at current levels, according to Societe Generale. Consumption growth is expected to decelerate in the quarters to come, given the declining of confidence, stagnation of labor market and the likelihood of inflation to normalize in 2016, added Societe Generale.