The inflationary streak that is being experienced in the world and in Mexico has not stopped the streak of reactivation of consumption in the country.

In April, revenues from retail sales grew 0.4% compared to the previous month, marking nine months of progress and reaching a new all-time high, according to the report of the Monthly Survey on Commercial Companies, which published yesterday by the National Institute of Geography and Statistics (Inegi).

Sales growth was mixed and was led by sales in department stores, computer equipment and telephones, as well as cars and trucks. These three subsectors led with increases of 4.9%, 4.7% and 2.3%, respectively.

The top 5 is completed by the lines of beverages, ice and tobacco (+2.2%) and fuels and lubricants (+2 percent).

In contrast, the declines in sales of motorcycles (-5.6%), perfumery (-4.4%), entertainment (-4.3%), health care items (-4.1%) and hardware products (-2.1 percent) stood out. ).

The falls in self-service stores (-1.4%) and groceries and food (-1.1%) also drew attention, which also accumulates a fall of 6% so far this year.

This slip coincides with high inflation in the food and beverage sub-index of the National Consumer Price Index (INPC), which in April stood at 12.06% (in that month general inflation was 7.68 percent).

However, the general increase in sales would have been associated with an improvement in the macroeconomic conditions of consumption, in addition to the continuous improvement of the health environment in the country.

The growth seems to be explained by the recovery of fundamentals. In detail, employment and wages accelerated in the period, remittances rebounded and consumer credit continued to strengthen,” said Juan Carlos Alderete, director of economic analysis at Grupo Financiero Banorte, in a report.

In April, the number of employed people in Mexico increased by one million 37,817 people, of which 58% joined a formal job. In that month, the labor participation rate (the Economically Active Population as a proportion of the population aged 15 and over) rose to 60.1%, the highest level so far in the pandemic and very close to the 60.2% of February 2020 , prior to the start of the confinements by Covid-19.

For their part, remittances sent from abroad to the country grew 16.5% annually to 4,718 million dollars, a historical amount for the month of April, according to figures from the Bank of Mexico. During the first four months of the year, the advance has been 17.6% to 17,240 million dollars.

Meanwhile, consumer credit had a real increase of 0.9% compared to March to 1,023 billion pesos, according to monthly information reported by the National Banking and Securities Commission.

“We anticipate that private consumption will show additional improvements in the coming months, conditional on infections remaining limited, employment continuing to advance and some obstructions in supply being resolved. However, the variable will moderate to the extent that high inflation erodes the purchasing power of households and the cost of credits becomes more expensive,” said Grupo Financiero Ve por Más.

Differentiated recovery

From January to April, retail sales accumulate an advance of 5.1% compared to the same period in 2021 and are already 2.4% above the same period in 2019, prior to the Covid-19 pandemic.

Considering the nine major sales categories that Inegi accounts for, four have already exceeded their pre-pandemic levels. Leading the way are internet and catalog sales, which are 115% higher compared to the first four months of 2019.

It is followed by sales of health products, with an advance of 16.9%, sales of hardware items (+10.2%) and income from self-service and department stores (+9.7 percent).

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