MEXICO CITY (Reuters) - Mexican retail sales grew in April at the fastest clip since Donald Trump’s election as U.S. president, industry data showed on Wednesday, as consumer demand rose despite high inflation, rising interest rates and economic headwinds.
Mexican retailers’ association ANTAD said sales at stores open at least a year rose 6.0 percent from April last year, the biggest jump since October 2016.
Trump’s surprise election in November raised the specter of recession in Mexico after his threats on the campaign trail to shred the North American Free Trade Agreement (NAFTA), a lynchpin of Latin America’s second-largest economy.
ANTAD members include Wal-Mart de Mexico WALMEXV.MX, or Walmex, and Soriana (SORIANAB.MX). Total sales, which include stores opened during the last 12 months, grew 9.1 percent from April 2016, the group said.
Walmex, the country’s biggest retailer, said on Monday that sales at its Mexican stores open at least a year rose 10.2 percent from April 2016, the strongest growth in six months.
Trump’s victory sent the peso into a tailspin, prompting several economists to slash growth forecasts. Inflation has hit its fastest pace in nearly eight years as government-administered gasoline prices have spiked.
But Mexico’s economy has so far defied the predictions, with several leading companies posting strong first-quarter earnings.
Underlining the brighter outlook, retail brand manager Grupo Axo plans to revive a stalled initial public offering later this month, sources told Reuters on Wednesday.
Despite occasional threats from Trump, his administration has moderated its tone on how it would approach a renegotiation of NAFTA, helping the peso to rebound from a record low in January.
The peso’s recovery should help cool price pressures, while robust job creation and abundant consumer credit have combined to buttress consumption.
With Trump threatening to crack down on illegal immigrants, remittances from Mexicans living abroad have lent added support to consumer spending. Remittances surged in March by 15.1 percent versus a year ago to $2.52 billion.
“Consumer confidence is recovering after the January shock. It’s a temporary shock,” said Rafael Camarena, an economist at Santander.
($1 = 19.0139 Mexican pesos)
Additional reporting by Sharay Angulo and Sheky Espejo; Editing by Dave Graham and Richard Chang