Consumer confidence in Mexico falls for the third consecutive month.

During the month of July, consumer confidence in Mexico experienced another decline, marking its third consecutive month of setbacks. According to data published by the National Institute of Statistics and Geography (Inegi), the consumer confidence index (CCI) stood at 46.9 points, representing a drop of 0.4 points compared to June. This phenomenon highlights a concerning outlook for the Mexican economy, which is currently facing a context of uncertainty and slowdown. The CCI consists of five key elements that analyze different facets of the economic confidence of Mexican households. In July, all components included in this indicator showed declines, with a notable loss of confidence regarding the country's economic situation in one year, which decreased by 0.7 points. This setback suggests growing concern among consumers about medium-term economic prospects. The current economic situation of households also experienced a decline, as did the evaluation of the state of the economy compared to the previous year. In this regard, both components were affected by 0.4 points. The likelihood of making purchases of durable goods, such as furniture and appliances, was also impacted, with a decrease of 0.3 points, which can be interpreted as a reflection of the lack of confidence in the economic future. The drop in consumer confidence is an indicator of the economic slowdown that has been observed in Mexico and poses additional risks for growth in the second half of the year. According to Banco Base, the close interdependence between the Mexican economy and that of the United States suggests that any slowdown in the neighboring country could lead to an even greater deterioration in consumer confidence in Mexico. This could have negative consequences for domestic consumption and, consequently, for the economy as a whole. Comparing the situation to July 2022, the CCI recorded an increase of 0.6 points, indicating that despite the recent decline, consumer confidence has improved in the long term. However, these data are not sufficient to alleviate current concerns, given that the context of uncertainty and changes in economic conditions may adversely influence consumer perceptions. In addition to the five main components of the CCI, Inegi considers ten other complementary indicators to measure the general sentiment of the population regarding the country's economy. In July, it was observed that eight of these indicators also experienced significant declines. Among the most concerning drops was a decrease of 2.9 points in the current ability to save part of income, reflecting growing worries about households' capacity to manage their finances. Another indicator that showed a considerable decline was the intention to build or remodel a home in the next two years, which fell by 2.3 points. This can be interpreted as a sign that consumers are adopting a cautious stance towards long-term investments, stemming from the current economic uncertainty. The drop of 1.8 points in savings expectations within a year adds further weight to this trend. On the other hand, not all complementary indicators showed declines. The employment situation in the country over the next 12 months improved by 0.5 points, a slight improvement that could offer some hope amid a complicated environment. Likewise, the assessment of personal economic situations compared to a year ago rose by 0.1 points, suggesting that some consumers may feel that their individual situation has remained stable. In conclusion, the decline in consumer confidence in Mexico during July is a worrying sign of a slowing economic environment. The loss of confidence in future prospects and the decrease in savings capacity reflect the concerns of Mexican households regarding the current economic situation. With the risks of further deterioration in the international economic context, it is crucial for both the government and economic actors to pay attention to these signals in order to adopt measures that promote stability and growth in the country.