Mexico’s Consumer Confidence Index (CCI) for December 2025 registered at 44.20, down 1.60 points from November’s 45.80 and missing the consensus estimate of 46.20, according to the latest data from the Sigmanomics database. This decline marks the lowest monthly reading since January 2025’s 47.10, reflecting a notable deterioration in consumer sentiment over the past year. The index remains well below the 12-month average of 46.10, underscoring persistent caution among Mexican households.

Drivers this month

• Rising inflationary pressures eroding purchasing power.
• Heightened geopolitical risks affecting trade and investment outlooks.
• Monetary tightening by Banco de México increasing borrowing costs.
• Fiscal policy constraints limiting government stimulus potential.

Policy pulse

The current reading sits below the central bank’s comfort zone, which targets inflation near 3%. Banco de México’s recent rate hikes to 11.25% have tightened financial conditions, contributing to subdued consumer optimism. The government’s cautious fiscal stance amid rising debt levels further dampens expectations for near-term relief.

Market lens

Immediate reaction: The Mexican peso (MXNUSD) weakened 0.30% within the first hour post-release, while the 2-year government bond yield rose 5 basis points, reflecting increased risk aversion. Breakeven inflation rates edged up slightly, signaling market concerns over persistent inflation pressures.

Consumer confidence is a leading indicator of household spending, which accounts for roughly 60% of Mexico’s GDP. The December reading aligns with recent trends in core macroeconomic indicators. Inflation remains elevated at 7.80% year-over-year, though it has moderated from a peak of 8.50% in mid-2025. Unemployment holds steady at 3.90%, near historic lows, but wage growth has slowed to 3.20% YoY, insufficient to offset inflation.

Monetary Policy & Financial Conditions

Banco de México has maintained a hawkish stance, raising the benchmark interest rate by 25 basis points in November to 11.25%. This marks the sixth hike since early 2025, aimed at curbing inflation. Higher rates have increased borrowing costs, dampening consumer credit growth, which slowed to 2.10% YoY in November from 3.50% earlier in the year.

Fiscal Policy & Government Budget

The government’s fiscal deficit widened slightly to 2.50% of GDP in Q3 2025, constrained by lower oil revenues and increased social spending. Public debt rose to 52% of GDP, limiting room for additional stimulus. The administration has prioritized fiscal prudence, which may restrain near-term consumption support.

Historical comparisons show the index peaked at 47.10 in January 2025 before trending downward amid inflationary pressures and monetary tightening. The current level is close to the 44.00 low recorded in April 2024, suggesting a cyclical trough in confidence.

Market lens

Immediate reaction: Following the print, the Mexican peso depreciated against the US dollar, while short-term bond yields rose, reflecting increased risk premiums. Equity markets showed mild declines, particularly in consumer discretionary sectors.

Looking ahead, Mexico’s consumer confidence trajectory will hinge on several factors. Inflation is expected to gradually ease toward 5.50% by mid-2026, contingent on sustained monetary tightening and stable commodity prices. However, external shocks such as US economic slowdown or renewed geopolitical tensions could exacerbate risks.

Scenario analysis

• Bullish (30% probability): Inflation moderates faster than expected, enabling Banco de México to pause rate hikes by Q2 2026. Consumer confidence rebounds above 47, supporting stronger consumption and GDP growth of 3.50% in 2026.
• Base (50% probability): Inflation declines gradually, but monetary policy remains restrictive. Confidence stabilizes near 45, with moderate consumption growth and GDP expansion around 2.20%.
• Bearish (20% probability): Inflation remains sticky, external shocks intensify, and fiscal constraints deepen. Confidence falls below 43, leading to weaker consumption and GDP growth below 1.50%.

Structural & Long-Run Trends

Long-term trends such as demographic shifts, urbanization, and digitalization continue to shape consumer behavior in Mexico. Rising middle-class incomes and expanding e-commerce offer growth potential, but structural challenges like income inequality and informal employment persist.

Mexico’s December 2025 Consumer Confidence reading signals a cautious consumer base facing inflationary pressures and tighter financial conditions. While core macro fundamentals remain stable, the risk of external shocks and fiscal limits pose downside risks. Policymakers must balance inflation control with growth support to sustain consumer spending. Market participants should monitor upcoming inflation data, central bank communications, and geopolitical developments closely.

Key Markets Likely to React to Consumer Confidence

Consumer confidence in Mexico strongly influences domestic consumption, credit markets, and currency valuations. Key tradable instruments historically sensitive to these shifts include Mexican equities, government bonds, and the peso. Monitoring these assets provides insight into market sentiment and economic momentum.

• MEXBOL – Mexico’s main stock index, sensitive to consumer spending trends.
• MXNUSD – The peso-dollar exchange rate, reflecting capital flows and risk appetite.
• WALMEX.MX – Retail giant, directly impacted by consumer sentiment.
• BTCUSD – Bitcoin, often a risk barometer amid macro uncertainty.
• USDMXN – The inverse of MXNUSD, useful for hedging currency risk.

Insight: Consumer Confidence vs. MEXBOL Since 2020

Since 2020, Mexico’s Consumer Confidence Index and the MEXBOL index have shown a positive correlation of approximately 0.68. Periods of rising confidence typically coincide with equity market rallies, reflecting improved consumer spending and corporate earnings. For example, the post-pandemic recovery in 2021 saw both metrics surge sharply. However, divergences occur during external shocks, such as the 2023 inflation spike, when confidence dipped but equities remained resilient due to monetary policy expectations.

FAQs

What does the latest Mexico Consumer Confidence reading indicate?

The December 2025 reading of 44.20 indicates declining consumer optimism, reflecting inflation pressures and tighter monetary policy.

How does consumer confidence impact Mexico’s economy?

Consumer confidence influences household spending, which drives about 60% of Mexico’s GDP, affecting growth and inflation dynamics.

What are the key risks to Mexico’s consumer outlook?

Risks include persistent inflation, monetary tightening, fiscal constraints, and external shocks such as geopolitical tensions or US economic slowdown.

Takeaway: Mexico’s consumer confidence decline in December 2025 underscores the challenges posed by inflation and monetary tightening. Policymakers face a delicate balancing act to restore optimism and sustain growth amid evolving risks.

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