Mexico's retail sales remain strong in October

Mexico's retail sales increased 0.3% m/m sa in October as a result of positive performance in several subsectors, while only healthcare and domestic equipment sales posted monthly declines. In annual terms, retail sales increased 4.8% y/y.

This result is in line with anticipated performance of the GDP for that month due on Wednesday 23 (0.0% m/m sa) and indicates only a moderate recovery from the 1.2% decline seen in September, suggesting a deceleration of retail in Q4.

In the coming months, this sector should lose some of its strength, as ANTAD same-store sales decreased 1.5% m/m sa in real terms in November while car sales decreased 3.2% m/m sa.

"Deceleration should be temporary, and we still believe consumption will drive growth in 2016, as employment and inflation should be supportive, although in a modest manner. Domestic equipment dragged on the overall figure and we continue to expect a deceleration of retail in Q4", says Barclays.