The Consumer Confidence Indicator (ICC) measured by Fedesarrollo showed a new collapse in Septembersince it fell by 9.1 percentage points (pps) compared to the previous month and stood at -11.5%.
(Fedesarrollo’s consumer confidence fell to -11.5%).
According to the entity’s report, the two components of the index saw reductions during the ninth month of the year: the Consumer Expectations Index (IEC), which fell 14.5 pps, from 16.1% to 1.6%, and the Index of Economic Conditions (ICE) that fell 0.9 pps, from -30.2% to -31.1%.
“This shows a lower consumer confidence compared to the previous month, despite the fact that the index has a positive trend so far this year,” the report highlighted.
According to the executive director of Fedesarrollo, Luis Fernando Mejía, there are several factors that may be negatively impacting confidence. In the external sphere, such as “everything that is happening internationally in terms of the winds of recession in several European countries and what is happening in the United States and the rise in interest rates.”
(The costs of accelerating the energy transition in the country).
At the local level, according to Mejía, “the inflationary phenomenon it is hitting the pockets of households and that deteriorates confidence”. Precisely the last one left by inflation was a level of 11.44%.
“And in the context of all this difficult situation, there is talk of a tax reform, which is undoubtedly necessary and can be improved, but it can affect consumer expectations,” said the director of Fedesarrollo.
According to Mejía, as long as these factors continue, confidence will surely not return to previous levels. “However, to the extent that we see improvements in the inflation indicator, or that the tax reform can be resolved in a much calmer way, or that the international environment improves, it could surely generate improvements in consumer confidence,” he indicated. .
According to the ICC bulletin, in September, consumer confidence decreased across all socioeconomic levels, in contrast to the previous month where it increased in all. The indicator is at -30.3% for the high level, -10.1% for the medium and -11.1% for low income.
Compared to the five cities where Fedesarrollo measures the ICC, it showed reductions in four of them, and only increased in Barranquilla (3.8 pps to 12.7%). In Bogotá it fell 9.8 pps, to -11.8%; in Medellín it fell 5.7 pps, to -21.7%; in Cali there was the greatest drop, -14.6 pps, for a level of -6.8% and in Bucaramanga it was -21.1% after a reduction of -14.5 pps.
On the other hand, the willingness to buy personal property and household appliances increased 2.4 pps compared to August 2022 and stood at -42.5% in September, the willingness to buy a house fell 2.0 pps compared to last month, to – 31.1%, and the purchase of vehicles fell 10.7 pps, to -66.6%.
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