Mexico | Consumption fell in May amid the displacement of the Hot Sale week

Summary

The BBVA Research Big Data Consumption Indicator (BDCI) reported a fall of (-)4.0% in May, with real figures adjusted for seasonality, amid the displacement of the Hot Sale week to the month of June

Key points

• Key points:
• Since its launch, the Hot Sale week had started the third week of May and ended on the last day of that month; this year the Hot Sale period began on May 29 and ended on June 6, with an impact on the seasonal pattern of the series.
• We anticipate an improvement in private consumption in June, as households materialize their planned purchases on that month taking advantage of the week of sales; as seen in the daily BDCI series, the average daily consumption of the Hot Sale period was 17.4% higher than the average daily expense observed during the first 28 days of May.
• The dynamism of consumption reflects the favorable evolution of wages and the wage bill, which from June 2022 to date have accumulated real gains of 5.2% and 8.9%, respectively (with seasonally adjusted figures).
• We estimate that the resilience of domestic demand will extend to 2Q23, given the improvements in real income and formal employment, with manufacturing resilience; we anticipate a slowdown in the second half of the year, given the lower growth in the US, with an effect on the Mexican export sector.
• Upward revision to our 2023 GDP growth estimate to 2.4% (1.4% previously) with momentum from 1H23; downward revision to our 2024 estimate to 1.8% (2.2% previous) due to the carry-over effect of the low performance of the economy in the second half of this year.

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