Mexico consumers shut wallets, sales drop most in five years

Mexican retail sales fell 3.2 percent in December from the previous month, data showed on Tuesday, the biggest such fall in more than five years for a sector that is a key to the country’s economic health.

The figures published by national statistics agency INEGI marked the sharpest decline in sales since August 2013.

Goldman Sachs and ratings agency Moody’s both cut their 2019 growth forecasts for Mexico this week, citing weak private investment from businesses apprehensive about the policies of new President Andres Manuel Lopez Obrador.

“The main engine of Mexico’s economy – private consumption on the demand side and services on the supply side – is losing trust at an alarming pace,” Goldman Sachs economist Alberto Ramos said in a research note after the retail data came out.

Mexican economic growth slowed to 0.2 percent in the last three months of 2018, and the economy contracted in December, the first month of the new government.

Lopez Obrador on Tuesday reiterated his target to achieve 4 percent average annual growth during his six year term.

“We’re going bit-by-bit, but we’re confident there will be growth and that we will meet our goals,” he told reporters.

Mexico’s economy grew by 2 percent last year.

Statistics agency INEGI said retail sales fell 1.3 percent in December from the same month a year earlier.

Additional reporting by Noe Torres; Editing by David Gregorio

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