The Day at a Glance | October 30 2023

*Economic sentiment in the Eurozone declined marginally in October and recorded its worst reading in nearly three years. Additionally, consumer inflation expectations have moderated slightly.

*In Mexico, INEGI (National Institute of Statistics and Geography) released Quarterly Tourism Activity Indicators (ITAT) for the second quarter of 2023.

*The Mexican Ministry of Finance and Public Credit (SHCP) reported approximately 1.5 million dollars (USD) in donations from multilateral banks in response to the situation in Acapulco.

Economic environment

Economic sentiment in the Eurozone exceeded market expectations in October, despite experiencing a slight decline compared to the previous month. The most recent economic sentiment indicator set at 93.3 points, marking a marginal decline from September´s reading, which was revised down to 93.4 points, falling to its lowest level since November 2020 but remaining above the market’s expected 93.0 points. The weak reading resulted from increased concerns among economic agents due to persistent inflationary, which have led to a particularly stringent stance on behalf of the European Central Bank. Thus, the sub-index for manufacturing fell to -9.3 from a previous -8.9, consumers´ dropped to -17.9 from -17.8, and the retail sector increased from -7.8 to -5.7. However, this was partially offset by slight improvements among service providers (4.5 vs. 4.1) and builders (-5.9 vs. -6.0). Lastly, it’s worth noting there was a moderation in the consumer inflation expectations index, which decreased to 11.4 from the 12.0 points logged in September.

Gross Domestic Product (GDP) for tourism recorded an annual 3.8% rate of growth in the 2Q23. This reading was driven by a 6.3% annual expansion in services, while the goods sector contracted by -5.0% y/y. On a quarterly basis, a similar trend was observed, with the tourism GDP advancing by 2.6%, a result of a 3.2% rate of growth in services, partially offset by a -0.7% decline in goods. Lastly, domestic tourism consumption increased by 3.5% on an annual basis and 0.5% on a quarterly basis, driven solely by the domestic market (7.8% y/y and 4.9% q/q), which managed to compensate for the contraction in inbound tourism (-15.2% y/y and -18.0% q/q).