Consumer Confidence in Mexico Jumps to 4-Year High Reuters
go to original August 3, 2012

MEXICO CITY - Mexican consumer confidence jumped to its highest in four years last month after voters elected a new government which has promised to boost economic growth.

Consumer confidence rose to 96.9 in July when adjusted for seasonal factors, the national statistics agency said on Friday, the highest since April 2008. This compared to a reading of 95.7 in June, which was adjusted slightly upwards from the original.

The boost followed presidential elections on July 1 when the party which ruled Mexico for much of last century, the Institutional Revolutionary Party or PRI, ousted the incumbent National Action Party (PAN).

Incoming president Enrique Pena Nieto, who takes office in December, has promised labor, fiscal and energy reforms in a bid to lift annual growth to 6 percent, well above the average 2.6 percent annual rate of the last two decades.

"There is the perspective the new government could have a higher probability to push forward some reforms," said Jorge Gordillo, an economist at CIBanco in Mexico City.

All five components of the confidence index rose, with Mexicans more optimistic about the outlook for their personal finances and for the economy in general since before the financial crisis struck in late 2008, pushing the country into a deep recession.

The rise defied recent data suggesting Mexico's economy, the second-largest in Latin America, is losing steam after a strong start to the year.

Weakening demand in the United States led to two consecutive monthly falls in manufactured exports in May and June.

Weaker growth is seen offsetting concerns about a rise in inflation to a 1-1/2-year high above the central bank's 4 percent inflation target ceiling, and will likely keep benchmark interest rates on hold at 4.5 percent, where they have been for the last three years.

The unadjusted consumer confidence index also rose, to 98.9 in July from 95.5 in June.

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