Private consumption and aggregate demand in Mexico

The largest component of aggregate demand is private consumption, representing close to 70% of Mexico‘s GDP, according to Banco Base.

According to the Monthly Indicator of Private Consumption in the Domestic Market published by INEGI, private consumption grew 7.11% in the first 10 months of 2022.

With this, private consumption is 4.03% above the pre-pandemic level (February 2020).

However, the private consumption indicator shows a deceleration in its growth.

In the first four months of 2022 it observed an average monthly growth rate of 0.74%; then, in May and June it registered contractions and from July to October it averaged a monthly growth of only 0.35 percent.

At an annual rate, the growth rates of September (5.88%) and October (5.78%) were the lowest since November 2021.

Thus, it is estimated that private consumption closed 2022 with an annual increase of close to 7% and that in 2023 it will grow only 1.92 percent.

Private consumption

Figures from the Asociación Nacional de Tiendas de Autoservicio y Departamentales (ANTAD) also show positive data, with an average annual growth of 11.09% in the first 11 months of the year in nominal same-store sales and a nominal growth of 8.14% in nominal sales in total stores, accumulated in the period January-November 2022, with respect to the same period of 2021.

It is important to highlight the good performance of consumption in most of 2022, despite an economic environment that was not favorable for consumers, particularly due to inflation that reached levels not seen in more than 20 years, generating a strong loss in household purchasing power.

Consumer confidence, published by INEGI, remained stable during the first half of the year and declined in the second half of the year, closing the year with a 3.74 percent decrease.

This, together with remittances, is related to the slowdown in consumption.

The main factors contributing to the growth of consumption in 2022 were:

  • The recovery in the labor market, with total employment surpassing pre-pandemic levels and unemployment and joblessness indicators returning to normal levels.
  • Full economic reopening and the return of mobility.
  • The growth of remittances, whose accumulated flow in the 12 months prior to November 2022 reached an all-time high of 57,890.91 million dollars.
  • Fiscal stimulus on gasoline and diesel prices, which helped contain the increase in fuel and basic food basket prices.


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