The Bank of Mexico will today publish its Consumer Confidence Index (ICC) for December. In November, the ICC fell to
The Bank of Mexico will today publish its Consumer Confidence Index (ICC) for December.
In November, the ICC fell to 36.7 from 37.6 following a new outbreak of COVID-19 cases, the application of strict social distancing measures including the restriction of non-essential activities, and pessimism regarding the current economic climate. Evidently, COVID-19 continues to put significant pressure on household and business confidence as well as private consumption. The country’s three economic indicators have remained significantly lower than their pre-pandemic levels.
According to President Andrés Manuel López Obrador, Mexico’s economy shrank by less than 8.9% in 2020 and could recover in the first quarter of 2021. However, during the first quarter, the economy will continue to struggle as certain sectors of the economy, including services, manufacturing and construction will not recover as quickly as expected with private investment continuing to decrease.
Expect consumer confidence to continue declining in the first quarter of 2021 as uncertainty permeates due to the pandemic and Mexico City continues to maintain its benchmark interest rate of 4.25%. In the medium term, the rebound of the economy and consumer confidence will depend on the relaxation of initiatives to mitigate the pandemic, the distribution of vaccines and the stabilisation of demand.
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