Retail sales grew 2.4% yoy in November (down from 3.8% in October), above our forecast of 2.0% and market consensus of 2.2% (as per Bloomberg). According to figures adjusted by working days reported by the statistics institute (INEGI), retail sales expanded at a similar pace than the headline figure (2.5%), taking the quarterly annual rate to 3.1% (from 4.3% in 3Q22). The key determinant of private consumption, the real wage bill growth, stood at a still decent 6.6% yoy in quarter ended in November (from 6.7% in 3Q22), with formal employment growing 3.9% (practically unchanged from 3Q22), while nominal wages increased 11.1% (from 11.4%). In turn, the quarterly annual growth rate of consumption credit from commercial banks in real terms stood at 7.8% yoy in November (from 6.0% in 3Q22), while remittances converted to pesos slowed to 6.0% (from 14.0%).
Retail sales momentum is soft in November, at the margin. Using seasonally adjusted figures, retail sales fell by 0.2% mom in November, taking quarter-over-quarter seasonally adjusted annualized rate (qoq/saar) to 1.3% in November (from 0.7% in 3Q22 and 3.3% in 2Q22).
GDP growth likely slowed down in the fourth quarter of last year and it will likely remain soft throughout 2023 given a weaker U.S. expansion. We expect GDP growth of 2.9% and 1.3% in 2022 and 2023, respectively.