- Consumption in Mexico has weakened recently, although aggregate income has remained relatively resilient. In this context, we explore the potential factors behind this divergence, as a clear understanding of these dynamics is key to informing coherent economic policy and supporting sound strategic decision-making across fiscal, monetary, and market-oriented investment strategies.
- In this special note, we analyse the relationship of income and consumption in Mexico between 2008 and 2025. Our findings suggest that consumption followed the trajectory of income between 2008 and 2017, but a decoupling trend began from 2018 onwards.
- This new regime is characterised by a substantial increase in household income that does not translate into a proportional dynamism in private spending. In other words, there is a discrepancy between Mexico’s estimated consumption (based on the country’s income dynamics) and the actual observed consumption, signalling that there are other exogenous factors to income that are depressing consumption.
- We found that remittances and wage bill are the main drivers of the resilience in income. However, in a context of high interest rates, consumption has decelerated due to a deceleration in job creation and the consequent slowdown of the wage mass.
- The outlook seems to be one of caution as Mexico moves into 2026. The "consumption engine" is sputtering not particularly due to a lack of fuel (as income remains resilient), but due to a blockage in the transmission lines (high rates, uncertainty, inequality and particularly, deceleration in job creation and wage mass). Closing the divergence between income and consumption will require not only higher wages but also an increase in productivity, sustained job creation, a broader restoration of confidence, a normalisation of credit conditions, and a re-engagement of the upper-income brackets in the economic cycle.