Mexico’s Consumption Accelerates with Record Growth in Credit Granting Despite High Interest Rates

Despite high interest rates, consumption in Mexico is accelerating and recorded a real annual growth of 13.5 percent in September in the credit granted by commercial banking to the private sector, according to Banco de México (Banxico).

This is its strongest growth since February 2013, when it expanded 14.8 percent in real terms and, furthermore, it has already It lasted seven months with double-digit annual increases.

Regarding consumption, the behavior in credit cards stands out, whose expansion was 17.3 percent real annual in September; in payroll it was 10.6 percent and in personal credit it was 8.4 percent.

The total amount of consumer credit was 1.36 billion pesosfrom a portfolio that contains 5.86 billion pesos.

Regarding housing A real annual growth of 5.2 percent was observed in the credit granted during September, lower than 5.5 percent in August; Meanwhile he credit to companies and people physical entities with business activity, the advance was 2.3 percent annually.

“Looking ahead, high real rates will likely keep lending subdued in the near term, which may be partially offset by resilient growth and construction investment momentum,” he said. Alberto Ramos of Goldman Sachs.

At a general level, the total credit portfolio grew 5.8 percent in real terms annually, accelerating for the third month in a row and being its highest rate since April 2020.