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Sight deposits hiked to 5.7% (YoY), while term deposits slowed down to 12.9% (YoY), influenced by possible signs of change in savings dynamics.
During the month of June, the weakness of the economy once again influenced the growth in the deposits of the banking system. Similarly to the last months, low growth rates of demand deposits predominated over double-digit growth rates of term deposits.
July 19, 2019
Mexico | The effects of economic weakness are accentuated over traditional bank deposits
The continued decline in the pace of economic activity and the risks in both commercial and economic policy have had an adverse influence on deposits of the banking system, to the point that the nominal growth of the traditional deposits during May 2019 was located at its lowest level since the end of 2013.
The combination of weak economic activity and high short-term interest rates maintain low growth over demand deposits, the main component of traditional deposits.
During the 1Q19, the fall in economic activity had a significant influence on traditional deposits, whose nominal annual growth of 7.8% (3.5% real) is the lowest since the end of 2013. This behavior is supported, mainly, in the stagnation of demand deposits, which predominated over the dynamism of time deposits.
In a context of economic slowdown and short-term rates at their highest level since 2009, traditional bank deposits show, in February, a fall in their growth rate to 7.5% annual nominal (3.4% real), a figure not observed since the beginning of 2014.
In January 2019 the nominal annual growth rate of traditional deposits (demand + term) of commercial banks was 7.8% (3.3% real), similar to the previous month (7.9%) and lower than the nominal growth rate registered in January 2018 (9.0%).
In November 2018, the nominal annual growth rate of traditional deposits (demand + term) of commercial banks was 9.8% (4.8% real), slightly higher than the previous month (9.4%), but lower than the nominal growth rate registered in November 2017 (10.9%).