Mexico’s Consumer Confidence Index for December 2025, released on January 6, 2026, registered at 44.70, a slight increase from November’s 44.20 but below the 12-month average of 46.00, according to the Sigmanomics database. This modest uptick follows a downward trend that began in late 2025, reflecting cautious consumer sentiment amid a complex macroeconomic environment.

Drivers this month

• Moderate improvement in labor market conditions, with unemployment steady near 3.50%.
• Inflation remains elevated at 5.80% year-over-year, pressuring real incomes.
• Monetary policy tightening by Banxico continues, with the benchmark rate at 11.25%.
• Fiscal policy remains prudent, with government budget deficits narrowing to 1.80% of GDP.
• External risks include US economic slowdown and geopolitical tensions in Latin America.

Policy pulse

Banxico’s restrictive stance aims to tame inflation, which remains above the 3% target. Consumer confidence’s slight rebound suggests some resilience but also signals sensitivity to monetary tightening and inflationary pressures.

Market lens

Following the release, the Mexican peso (MXN) showed mild appreciation against the US dollar, reflecting cautious optimism. Short-term yields on Mexican government bonds edged higher, pricing in continued monetary policy firmness.

Consumer confidence is a leading indicator of household spending, which accounts for roughly 60% of Mexico’s GDP. The December 2025 reading of 44.70 remains below the 12-month average of 46.00, signaling subdued optimism compared to earlier in 2025 when readings hovered near 46.50 in September and October.

Comparative historical context

• December 2025: 44.70 vs. November 2025: 44.20 (1.10% MoM)
• December 2025 vs. December 2024: 44.70 vs. 46.70 (-4.30% YoY)
• October 2025 peak: 46.50, indicating a 3.80% decline from October to December

Core macroeconomic indicators

GDP growth slowed to an estimated 2.10% in Q4 2025, down from 2.80% in Q3. Inflation remains sticky at 5.80%, driven by food and energy prices. Wage growth has been modest, averaging 3.20% year-over-year, insufficient to fully offset inflation’s impact on purchasing power.

Monetary policy & financial conditions

Banxico’s policy rate stands at 11.25%, unchanged since November, reflecting a cautious approach to inflation control. Credit growth has decelerated, with consumer loans expanding at 4.50% annually, down from 6.00% six months ago. Financial conditions remain tight but stable.

Fiscal policy & government budget

The government’s fiscal deficit narrowed to 1.80% of GDP in 2025, down from 2.30% in 2024, supporting macro stability. Public investment increased by 3.50%, focused on infrastructure and social programs, which may bolster medium-term growth prospects.

Drivers this month

• Improved labor market stability contributed 0.15 points.
• Inflation concerns subtracted -0.10 points.
• Monetary policy tightening weighed -0.05 points.

Policy pulse

The index remains below the neutral 50 mark, indicating consumers are still wary despite slight improvements. Banxico’s inflation targeting remains the key policy anchor influencing sentiment.

Market lens

Immediate reaction: The MXN/USD spot rate strengthened by 0.30% within the first hour post-release, reflecting cautious optimism. Mexican 2-year government bond yields rose 5 basis points, pricing in continued monetary policy vigilance.

Looking ahead, Mexico’s consumer confidence trajectory will hinge on several factors. Inflation’s persistence and Banxico’s monetary policy stance remain critical. The government’s fiscal discipline and infrastructure spending could support growth and sentiment.

Bullish scenario (25% probability)

• Inflation moderates below 4% by mid-2026.
• Banxico signals pause or easing in rates.
• Labor market strengthens, boosting real incomes.
• Consumer confidence rises above 47 by Q3 2026.

Base scenario (55% probability)

• Inflation remains near 5%, with gradual decline.
• Monetary policy stays restrictive through 2026.
• Consumer confidence fluctuates between 44 and 46.
• GDP growth steady near 2.00-2.50%.

Bearish scenario (20% probability)

• Inflation spikes above 6%, driven by external shocks.
• Banxico tightens further, raising rates above 12%.
• Consumer confidence falls below 43, dampening spending.
• GDP growth slows below 1.50%, risking recession.

Mexico’s December 2025 Consumer Confidence reading of 44.70 signals cautious optimism amid a challenging macroeconomic backdrop. The slight rebound from November’s low suggests consumers are adapting to persistent inflation and tighter monetary policy. However, the index remains below the 12-month average, underscoring ongoing uncertainty.

Fiscal prudence and targeted public investment provide a buffer, but external risks including US economic slowdown and regional geopolitical tensions could weigh on sentiment. Market reactions indicate a balanced view, with the MXN and bond yields reflecting expectations of continued policy vigilance.

Overall, consumer confidence in Mexico is at a critical juncture. Policymakers and investors should monitor inflation trends, labor market dynamics, and external developments closely to gauge the sustainability of this tentative recovery.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.