Mexican retail sales slow sharply in June

Mexican retail sales slowed sharply in June, continuing the trend seen since the last US elections and amid high inflation.

Retail sales slowed to a 0.4% year-on-year pace after having risen by 4.1% in April, falling far short of the 2.8% increase expected by economists.

Falls by categories were broad-based, with clothing sales down by 2.7% on the month, those of stationery by 2.3% and those of the "key" supermarket and department store segment shrinking by 0.6%, Andres Abadia at Pantheon Macroeconomics pointed out.

Nevertheless, Abadia expected inflation to stabilise in the next few months, supporting real income growth and consumer spend in 2018.

Indeed, in his opinion the country's fundamentals remained "resilient".

"The strength of the labor market, and relatively healthy remittance inflows—even taking into account this year’s MXN rebound—will give some relief to Mexican consumers over Q4 and 2018."