Private Consumption in Mexico Slows Down: It Fell by 0.5% in December

Mexico City, February 16. The Timely Indicator of Private Consumption (IOCP), published by Inegi this Friday, indicates a 0.5% contraction in spending on goods and services during December.

The IOCP is an experimental statistic that offers an econometric estimate on the evolution of the Monthly Indicator of Private Consumption (IMCP).

Since 2023, private consumption in Mexico has shown a downward trend. In 2024, the slowdown is becoming more pronounced. In August, the year-on-year growth was 2.7%, while in September it fell to 1.8%.

Factors affecting the slowdown

Various factors have influenced this decline in consumption. Although inflation has begun to moderate, it continues to affect consumers' purchasing power.

Political uncertainty and lower job creation have also caused caution in household spending.

Additionally, insecurity limits the operational capacity of many companies, which impacts economic activity.

Impact on the national economy

Private consumption is a key pillar of the Mexican economy, representing a significant part of the GDP.

The slowdown in this area adds uncertainty to the economic outlook. During the first half of 2024, consumption was driven by social aid and an increase in remittances. However, in the second half of the year, this momentum has decreased.

Outlook for 2025

Analysts predict that the weakness in consumption will persist in the coming months. Caution in purchasing durable goods and the reduction of formal employment continue to be factors affecting the economy.

The outlook for 2025 will depend on the country's ability to face these challenges and the policies the government implements to stimulate domestic demand.

The IMCP, which will reveal the definitive growth of private consumption in December, will be published on March 5.

Additionally, on January 30, Inegi presented its Timely Estimate of Quarterly Gross Domestic Product (EOPIBT) for the last quarter of 2024, which showed a 0.6% decline.

This figure represents the first contraction of Mexico's GDP since the third quarter of 2021, when a 0.9% drop was recorded.