Consumer sentiment for Q3 2024 improved as the overall confidence index (CI) turned less negative, at -15.6% from -20.5% in the Q2 2024 survey results. This reflects the decrease in the percentage of pessimists, which outweighed the slight reduction of optimists.
According to the respondents, their less pessimistic sentiment for Q3 2024 was attributed to expectations of: (a) higher income from wages/salaries, remittances, and other sources, (b) additional sources of income, (c) permanent employment and more available jobs, and (d) additional working family members.
For the next quarter (Q4 2024), the consumer outlook turned optimistic as the CI reverted to positive territory at 0.7% from -0.4 % in Q2 2024. Meanwhile, consumer confidence for the next 12 months was less confident as the CI declined to 9.9% from 13.5% in Q2 2024.
For Q3 2024, consumer sentiment improved across all component indicators and income groups. Across the three component indicators, the consumer outlook for Q3 2024 was less pessimistic for the country's economic condition and financial situation and little changed for family income. Consistent with the national trend, consumer confidence across income groups (i.e., low-income, middle-income, and high-income groups) was also less pessimistic for Q3 2024.
Consumers are more hesitant about buying big-ticket items in Q3 2024. The consumer sentiment on buying big-ticket items for Q3 2024 was more pessimistic as the CI turned negative at -68.% % from -64.5% in Q2 2024.
The percentage of households with savings declined, while those with loans Increased in Q3 2024. For Q3 2024, the percentage of households with savings decreased to 29% from 31.4% in Q2 2024.
Meanwhile, about 25.5% of the households availed of a loan in the last 12 months, slightly higher than the 24.6% recorded in Q2 2024.
Consumers expect higher interest rates, a weaker peso, and a higher unemployment rate for all reference periods. Consumers anticipate that interest rates may increase and the peso may depreciate against the U.S. dollar for Q3 and Q4 2024 and the next 12 months. Similarly, households expect the unemployment rate to increase across all reference periods.
\Further, households expect inflation to grow faster for the rest of 2024 as the number of respondents who expected higher inflation increased compared with the Q2 2024 survey results. Specifically, consumers expect the inflation rate to average 5.9% for the next 12 months, above the National Government's inflation target range of 2% to 4% for 2024-2025.
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