Mexico's retail sales shows strong surprising performance

Mexico's retail sales increased 1.5% m/m sa in August as a result of strong sales in hardware, apparel and supermarket sales, partially compensated by declines in domestic equipment, paper and entertainment and food sales. In annual terms, retail sales increased 6.4% y/y, the highest expansion since February 2012.

This print puts some upward risks to their GDP forecast for August (0.1% m/m sa) due next Monday, suggesting that consumption might remain solid during Q3, as both employment and inflation have performed well in the past months, says Barclays.   

This report confirms that strength of the economy still lies in the domestic demand despite some external headwinds. In any case, a slight deceleration of this component is expected to down the road but this might not occur until Q4. So far, ANTAD same store sales declined 1.1% m/m sa in real terms in September, added Barclays.