Trade uncertainty over U.S. tariff policies has wreaked havoc on Mexican household spending. According to the National Institute of Statistics and Geography (INEGI), the Monthly Private Consumption Indicator (IMCP)registered a 0.2% drop in March of this year compared to the previous month, while in annual terms it showed a decrease of 1.3%.
By component, consumption of domestic goods and services decreased 0.5% in March compared to February of this year, with a consistent decrease in goods and services. In contrast, consumption of imported goods showed a slight increase of 0.4%.
Compared to the same period in 2024, spending on domestic goods and services fell 0.4%, with a 1.0% decline in goods and a 0.5% increase in services. Meanwhile, consumption of imported goods fell significantly by 6.1%.
In this regard, the imported goods that experienced the sharpest decline were durable goods, with a monthly contraction of 0.5% and an annual contraction of 8.6%.
During the first quarter of 2025 (1Q25), several economic indicators in Mexico showed declines or barely significant increases. Gross Domestic Product (GDP) grew by just 0.2%, while secondary activities, such as industry and manufacturing, registered a 1.3% annual decline.
Meanwhile, the Timely Indicator of Economic Activity (IOAE) estimated a 0.16% decline in March, marking the second consecutive month of contraction. In the manufacturing sector, production fell 0.34% year-on-year in March.
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