Global Consumer Confidence Report: June 2024

Mexico: Elections and the strong Peso

Mexicans went to the polls on June 2nd to elect a new president. Our colleagues from global politics analyzed the result in the latest Counter/Consensus newsletter. The week after the elections, consumer sentiment in Mexico continued to slide. Despite the brief volatility, we have been noticing a downward momentum in consumer sentiment since April 2024. In the last two months, the sentiment index dropped six points. 

Since October 2023, Mexican Peso has been appreciating against the U.S. dollar.  Although after the elections, Mexico’s currency quickly depreciated, the peso’s strength is noticeable with an approximately 35% increase against the dollar since its low in 2020. Interest rate differentials, increasing trade with the U.S. and the rise in  nearshoring all support the peso’s appreciation. However, this appreciation may also influence consumer sentiment. Mexico is a large receiver of remittances; the strong peso means that the dollars sent from the U.S. do not go as far as they used to.

South Africa: Uncertainty looms, sentiment deteriorates 

With the May 29 elections, the African National Congress (ANC) lost its majority and as we write this report, is in negotiations to form a government. Political uncertainty is another blow to consumer sentiment, which has deteriorated in the last month. Morning Consult collects its sentiment data daily. When aggregated to a quarterly frequency, Morning Consult’s South Africa consumer sentiment index (although differently constructed) follows the same direction of the consumer confidence index by the Bureau of Economic Research in South Africa. Both indexes showed improvement in the first quarter but looking at the first two month’s data for the second quarter and the uncertainty brought on by the elections, we would expect to see a drop in sentiment for the second quarter of the year.

France: Headed for snap elections as economic sentiment sour

June 9th European Parliament elections dealt a blow to President Emmanuel Macron’s Renaissance Party. President Macron announced snap elections for the lower house of parliament in France for June 30th followed by a runoff election on July 7th. Our colleagues in Global Politics collect data on global leaders’ approval ratings. After the June 9th elections, we looked at how the economic sentiment for those who approve Macron as a leader fared – Unsurprisingly, we noticed a sharp decline. President Macron has three years left of this second term presidency and will stay in power regardless of the election results. However, dropping sentiment among Macron’s “approvers” does not bode well for his party in the legislative elections in two weeks.